Correlation Between Fidelity Mid and Fidelity Series

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

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

Diversification Opportunities for Fidelity Mid and Fidelity Series

0.97

Correlation Coefficient

Fidelity Mid  Fidelity Series

Almost no diversification

The 3 months correlation between Fidelity and Fidelity is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Mid Cap Stock and Fidelity Series Intrinsic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Intrinsic and Fidelity Mid 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 Mid Cap Stock 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 Intrinsic has no effect on the direction of Fidelity Mid i.e., Fidelity Mid and Fidelity Series go up and down completely randomly.

Pair Corralation between Fidelity Mid and Fidelity Series

Assuming the 90 days horizon Fidelity Mid Cap Stock is expected to generate 0.83 times more return on investment than Fidelity Series. However, Fidelity Mid Cap Stock is 1.21 times less risky than Fidelity Series. It trades about 0.23 of its potential returns per unit of risk. Fidelity Series Intrinsic is currently generating about 0.13 per unit of risk. If you would invest  4,191  in Fidelity Mid Cap Stock on September 2, 2024 and sell it today you would earn a total of  513.00  from holding Fidelity Mid Cap Stock or generate 12.24% return on investment over 90 days.

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

Fidelity Mid Cap Stock  vs.  Fidelity Series Intrinsic

Fidelity Mid Cap

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Mid Cap Stock are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity Series Intrinsic

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with Fidelity Mid and Fidelity Series

The main advantage of trading using opposite Fidelity Mid and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Mid 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 Fidelity Mid Cap Stock and Fidelity Series Intrinsic 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.