Correlation Between Ab Small and Fidelity Sai

Can any of the company-specific risk be diversified away by investing in both Ab Small and Fidelity Sai 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 Ab Small and Fidelity Sai into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Small Cap and Fidelity Sai Long Term, you can compare the effects of market volatilities on Ab Small and Fidelity Sai 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 Ab Small with a short position of Fidelity Sai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Fidelity Sai.

Diversification Opportunities for Ab Small and Fidelity Sai

-0.5

Correlation Coefficient

Ab Small  Fidelity Sai

Very good diversification

The 3 months correlation between QUAZX and Fidelity is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Fidelity Sai Long Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Long and Ab 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 Ab Small Cap are associated (or correlated) with Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Long has no effect on the direction of Ab Small i.e., Ab Small and Fidelity Sai go up and down completely randomly.

Pair Corralation between Ab Small and Fidelity Sai

Assuming the 90 days horizon Ab Small Cap is expected to under-perform the Fidelity Sai. In addition to that, Ab Small is 1.97 times more volatile than Fidelity Sai Long Term. It trades about -0.12 of its total potential returns per unit of risk. Fidelity Sai Long Term is currently generating about 0.09 per unit of volatility. If you would invest  672.00  in Fidelity Sai Long Term on December 20, 2024 and sell it today you would earn a total of  27.00  from holding Fidelity Sai Long Term or generate 4.02% return on investment over 90 days.

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

Ab Small Cap  vs.  Fidelity Sai Long Term

Ab Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ab Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Fidelity Sai Long

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sai Long Term are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Sai is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Small and Fidelity Sai

The main advantage of trading using opposite Ab Small and Fidelity Sai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Fidelity Sai 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 Sai will offset losses from the drop in Fidelity Sai's long position.

The idea behind Ab Small Cap and Fidelity Sai Long Term 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.