Correlation Between Mid-cap 15x and Fidelity Series

Can any of the company-specific risk be diversified away by investing in both Mid-cap 15x 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 Mid-cap 15x and Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mid Cap 15x Strategy and Fidelity Series Large, you can compare the effects of market volatilities on Mid-cap 15x 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 Mid-cap 15x with a short position of Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid-cap 15x and Fidelity Series.

Diversification Opportunities for Mid-cap 15x and Fidelity Series

0.28

Correlation Coefficient

Mid-cap 15x  Fidelity Series

Modest diversification

The 3 months correlation between Mid-cap and Fidelity is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and Fidelity Series Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Large and Mid-cap 15x 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 Mid Cap 15x Strategy 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 Large has no effect on the direction of Mid-cap 15x i.e., Mid-cap 15x and Fidelity Series go up and down completely randomly.

Pair Corralation between Mid-cap 15x and Fidelity Series

Assuming the 90 days horizon Mid Cap 15x Strategy is expected to generate 1.03 times more return on investment than Fidelity Series. However, Mid-cap 15x is 1.03 times more volatile than Fidelity Series Large. It trades about 0.25 of its potential returns per unit of risk. Fidelity Series Large is currently generating about 0.0 per unit of risk. If you would invest  13,387  in Mid Cap 15x Strategy on October 25, 2024 and sell it today you would earn a total of  746.00  from holding Mid Cap 15x Strategy or generate 5.57% return on investment over 90 days.

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

Mid Cap 15x Strategy  vs.  Fidelity Series Large

Mid Cap 15x

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap 15x Strategy are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Mid-cap 15x may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Fidelity Series Large

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Series Large are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Fidelity Series may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Mid-cap 15x and Fidelity Series

The main advantage of trading using opposite Mid-cap 15x and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid-cap 15x 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 Mid Cap 15x Strategy and Fidelity Series Large 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.