Correlation Between Fidelity New and Midcap Fund
Can any of the company-specific risk be diversified away by investing in both Fidelity New and Midcap Fund 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 Fidelity New and Midcap Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity New Markets and Midcap Fund Class, you can compare the effects of market volatilities on Fidelity New and Midcap Fund 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 Fidelity New with a short position of Midcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Midcap Fund.
Diversification Opportunities for Fidelity New and Midcap Fund
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Midcap is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Markets and Midcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Fund Class and Fidelity New 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 Fidelity New Markets are associated (or correlated) with Midcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Fund Class has no effect on the direction of Fidelity New i.e., Fidelity New and Midcap Fund go up and down completely randomly.
Pair Corralation between Fidelity New and Midcap Fund
Assuming the 90 days horizon Fidelity New Markets is expected to generate 0.29 times more return on investment than Midcap Fund. However, Fidelity New Markets is 3.47 times less risky than Midcap Fund. It trades about 0.4 of its potential returns per unit of risk. Midcap Fund Class is currently generating about 0.09 per unit of risk. If you would invest 1,260 in Fidelity New Markets on June 1, 2025 and sell it today you would earn a total of 70.00 from holding Fidelity New Markets or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Fidelity New Markets vs. Midcap Fund Class
Performance |
| Timeline |
| Fidelity New Markets |
| Midcap Fund Class |
Fidelity New and Midcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity New and Midcap Fund
The main advantage of trading using opposite Fidelity New and Midcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity New position performs unexpectedly, Midcap Fund 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 Midcap Fund will offset losses from the drop in Midcap Fund's long position.| Fidelity New vs. Fidelity Freedom 2015 | Fidelity New vs. Fidelity Puritan Fund | Fidelity New vs. Fidelity Puritan Fund | Fidelity New vs. Fidelity Pennsylvania Municipal |
| Midcap Fund vs. Morningstar Global Income | Midcap Fund vs. Morgan Stanley Global | Midcap Fund vs. Leuthold Global Fund | Midcap Fund vs. Asg Global Alternatives |
Check out your portfolio center.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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