Correlation Between Fidelity Large and Fidelity Mega

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

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

Diversification Opportunities for Fidelity Large and Fidelity Mega

0.99

Correlation Coefficient

Fidelity Large  Fidelity Mega

No risk reduction

The 3 months correlation between Fidelity and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Large Cap and Fidelity Mega Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Mega Cap and Fidelity Large 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 Large Cap are associated (or correlated) with Fidelity Mega. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Mega Cap has no effect on the direction of Fidelity Large i.e., Fidelity Large and Fidelity Mega go up and down completely randomly.

Pair Corralation between Fidelity Large and Fidelity Mega

Assuming the 90 days horizon Fidelity Large is expected to generate 1.15 times less return on investment than Fidelity Mega. In addition to that, Fidelity Large is 1.18 times more volatile than Fidelity Mega Cap. It trades about 0.24 of its total potential returns per unit of risk. Fidelity Mega Cap is currently generating about 0.33 per unit of volatility. If you would invest  2,545  in Fidelity Mega Cap on May 6, 2025 and sell it today you would earn a total of  373.00  from holding Fidelity Mega Cap or generate 14.66% return on investment over 90 days.

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

Fidelity Large Cap  vs.  Fidelity Mega Cap

Fidelity Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Large Cap are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Large may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Fidelity Mega Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Mega Cap are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Mega showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity Large and Fidelity Mega

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

The idea behind Fidelity Large Cap and Fidelity Mega Cap 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.