Correlation Between Fidelity Low and Mid Cap
Can any of the company-specific risk be diversified away by investing in both Fidelity Low and Mid Cap 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 Low and Mid Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Low Priced Stock and Mid Cap Value, you can compare the effects of market volatilities on Fidelity Low and Mid Cap 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 Low with a short position of Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Low and Mid Cap.
Diversification Opportunities for Fidelity Low and Mid Cap
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Mid is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Low Priced Stock and Mid Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Value and Fidelity Low 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 Low Priced Stock are associated (or correlated) with Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Value has no effect on the direction of Fidelity Low i.e., Fidelity Low and Mid Cap go up and down completely randomly.
Pair Corralation between Fidelity Low and Mid Cap
Assuming the 90 days horizon Fidelity Low Priced Stock is expected to generate 0.93 times more return on investment than Mid Cap. However, Fidelity Low Priced Stock is 1.08 times less risky than Mid Cap. It trades about -0.15 of its potential returns per unit of risk. Mid Cap Value is currently generating about -0.15 per unit of risk. If you would invest 4,628 in Fidelity Low Priced Stock on January 19, 2024 and sell it today you would lose (107.00) from holding Fidelity Low Priced Stock or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Low Priced Stock vs. Mid Cap Value
Performance |
| Timeline |
| Fidelity Low Priced |
| Mid Cap Value |
Fidelity Low and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Low and Mid Cap
The main advantage of trading using opposite Fidelity Low and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Low position performs unexpectedly, Mid Cap 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 Mid Cap will offset losses from the drop in Mid Cap's long position.| Fidelity Low vs. Prudential Jennison Servative | Fidelity Low vs. Prudential Jennison Equity | Fidelity Low vs. Prudential Jennison Small | Fidelity Low vs. Prudential Total Return |
| Mid Cap vs. Prudential Jennison Servative | Mid Cap vs. Prudential Jennison Equity | Mid Cap vs. Prudential Jennison Small | Mid Cap vs. Prudential Total Return |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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