Correlation Between Hunter Small and Fidelity Series

Can any of the company-specific risk be diversified away by investing in both Hunter Small and Fidelity Series at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hunter Small and Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hunter Small Cap and Fidelity Series 0 5, you can compare the effects of market volatilities on Hunter Small and Fidelity Series and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hunter Small with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunter Small and Fidelity Series.

Diversification Opportunities for Hunter Small and Fidelity Series

-0.35

Correlation Coefficient

Hunter Small  Fidelity Series

Very good diversification

The 3 months correlation between Hunter and Fidelity is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hunter Small Cap and Fidelity Series 0 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series 0 and Hunter Small is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hunter Small Cap are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series 0 has no effect on the direction of Hunter Small i.e., Hunter Small and Fidelity Series go up and down completely randomly.

Pair Corralation between Hunter Small and Fidelity Series

Assuming the 90 days horizon Hunter Small Cap is expected to under-perform the Fidelity Series. In addition to that, Hunter Small is 8.34 times more volatile than Fidelity Series 0 5. It trades about -0.09 of its total potential returns per unit of risk. Fidelity Series 0 5 is currently generating about 0.4 per unit of volatility. If you would invest  963.00  in Fidelity Series 0 5 on December 21, 2024 and sell it today you would earn a total of  26.00  from holding Fidelity Series 0 5 or generate 2.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hunter Small Cap  vs.  Fidelity Series 0 5

Hunter Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hunter Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hunter Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Series 0

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Series 0 5 are ranked lower than 31 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hunter Small and Fidelity Series

The main advantage of trading using opposite Hunter Small and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunter Small position performs unexpectedly, Fidelity Series can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fidelity Series will offset losses from the drop in Fidelity Series' long position.

The idea behind Hunter Small Cap and Fidelity Series 0 5 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.