Correlation Between Fidelity Small and First Trust/confluence
Can any of the company-specific risk be diversified away by investing in both Fidelity Small and First Trust/confluence 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 Small and First Trust/confluence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Small Cap and First Trustconfluence Small, you can compare the effects of market volatilities on Fidelity Small and First Trust/confluence 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 Small with a short position of First Trust/confluence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and First Trust/confluence.
Diversification Opportunities for Fidelity Small and First Trust/confluence
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and First is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and First Trustconfluence Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust/confluence and Fidelity 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 Fidelity Small Cap are associated (or correlated) with First Trust/confluence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust/confluence has no effect on the direction of Fidelity Small i.e., Fidelity Small and First Trust/confluence go up and down completely randomly.
Pair Corralation between Fidelity Small and First Trust/confluence
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 1.13 times more return on investment than First Trust/confluence. However, Fidelity Small is 1.13 times more volatile than First Trustconfluence Small. It trades about -0.01 of its potential returns per unit of risk. First Trustconfluence Small is currently generating about -0.04 per unit of risk. If you would invest 2,878 in Fidelity Small Cap on April 18, 2025 and sell it today you would lose (92.00) from holding Fidelity Small Cap or give up 3.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.19% |
| Values | Daily Returns |
Fidelity Small Cap vs. First Trustconfluence Small
Performance |
| Timeline |
| Fidelity Small Cap |
| First Trust/confluence |
Fidelity Small and First Trust/confluence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and First Trust/confluence
The main advantage of trading using opposite Fidelity Small and First Trust/confluence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small position performs unexpectedly, First Trust/confluence 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 First Trust/confluence will offset losses from the drop in First Trust/confluence's long position.| Fidelity Small vs. Fidelity Mid Cap | Fidelity Small vs. Fidelity International Index | Fidelity Small vs. Fidelity Bond Index | Fidelity Small vs. Fidelity Large Cap |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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