Correlation Between Fidelity Series and Fidelity Value

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

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

Diversification Opportunities for Fidelity Series and Fidelity Value

0.97

Correlation Coefficient

Fidelity Series  Fidelity Value

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 Series Intrinsic and Fidelity Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Value and Fidelity Series 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 Series Intrinsic are associated (or correlated) with Fidelity Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Value has no effect on the direction of Fidelity Series i.e., Fidelity Series and Fidelity Value go up and down completely randomly.

Pair Corralation between Fidelity Series and Fidelity Value

Assuming the 90 days horizon Fidelity Series Intrinsic is expected to generate 0.91 times more return on investment than Fidelity Value. However, Fidelity Series Intrinsic is 1.09 times less risky than Fidelity Value. It trades about -0.06 of its potential returns per unit of risk. Fidelity Value Fund is currently generating about -0.14 per unit of risk. If you would invest  1,168  in Fidelity Series Intrinsic on February 5, 2024 and sell it today you would lose (13.00) from holding Fidelity Series Intrinsic or give up 1.11% of portfolio value over 90 days.

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

Fidelity Series Intrinsic  vs.  Fidelity Value Fund

Fidelity Series Intrinsic

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Series Intrinsic are ranked lower than 12 (%) 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 June 2024.

Fidelity Value

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Value Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Fidelity Value may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Fidelity Series and Fidelity Value

The main advantage of trading using opposite Fidelity Series and Fidelity Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Series position performs unexpectedly, Fidelity Value 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 Value will offset losses from the drop in Fidelity Value's long position.

The idea behind Fidelity Series Intrinsic and Fidelity Value Fund 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.