Correlation Between Intermediate Term and Fidelity Small
Can any of the company-specific risk be diversified away by investing in both Intermediate Term and Fidelity Small 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 Intermediate Term and Fidelity Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Term Bond Fund and Fidelity Small Cap, you can compare the effects of market volatilities on Intermediate Term and Fidelity Small 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 Intermediate Term with a short position of Fidelity Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Term and Fidelity Small.
Diversification Opportunities for Intermediate Term and Fidelity Small
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intermediate and Fidelity is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Term Bond Fund and Fidelity Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Small Cap and Intermediate Term 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 Intermediate Term Bond Fund are associated (or correlated) with Fidelity Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Small Cap has no effect on the direction of Intermediate Term i.e., Intermediate Term and Fidelity Small go up and down completely randomly.
Pair Corralation between Intermediate Term and Fidelity Small
Assuming the 90 days horizon Intermediate Term is expected to generate 6.43 times less return on investment than Fidelity Small. But when comparing it to its historical volatility, Intermediate Term Bond Fund is 4.05 times less risky than Fidelity Small. It trades about 0.11 of its potential returns per unit of risk. Fidelity Small Cap is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,802 in Fidelity Small Cap on April 23, 2025 and sell it today you would earn a total of 240.00 from holding Fidelity Small Cap or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Term Bond Fund vs. Fidelity Small Cap
Performance |
| Timeline |
| Intermediate Term Bond |
| Fidelity Small Cap |
Intermediate Term and Fidelity Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Term and Fidelity Small
The main advantage of trading using opposite Intermediate Term and Fidelity Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Term position performs unexpectedly, Fidelity Small 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 Small will offset losses from the drop in Fidelity Small's long position.| Intermediate Term vs. Oppenheimer Gold Special | Intermediate Term vs. Sprott Gold Equity | Intermediate Term vs. Global Gold Fund | Intermediate Term vs. International Investors Gold |
| Fidelity Small vs. Fidelity Freedom 2015 | Fidelity Small vs. Fidelity Puritan Fund | Fidelity Small vs. Fidelity Puritan Fund | Fidelity Small vs. Fidelity Pennsylvania Municipal |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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