Correlation Between Fidelity Flex and Select Fund

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

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

Diversification Opportunities for Fidelity Flex and Select Fund

0.91

Correlation Coefficient

Fidelity Flex  Select Fund

Almost no diversification

The 3 months correlation between Fidelity and Select is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Flex Servative and Select Fund C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Fund C and Fidelity Flex 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 Flex Servative are associated (or correlated) with Select Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Fund C has no effect on the direction of Fidelity Flex i.e., Fidelity Flex and Select Fund go up and down completely randomly.

Pair Corralation between Fidelity Flex and Select Fund

Assuming the 90 days horizon Fidelity Flex is expected to generate 16.25 times less return on investment than Select Fund. But when comparing it to its historical volatility, Fidelity Flex Servative is 12.0 times less risky than Select Fund. It trades about 0.16 of its potential returns per unit of risk. Select Fund C is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  9,306  in Select Fund C on July 2, 2025 and sell it today you would earn a total of  937.00  from holding Select Fund C or generate 10.07% return on investment over 90 days.

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

Fidelity Flex Servative  vs.  Select Fund C

Fidelity Flex Servative

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Flex Servative are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Fidelity Flex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Select Fund C

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Select Fund C are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Select Fund may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Fidelity Flex and Select Fund

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

The idea behind Fidelity Flex Servative and Select Fund C 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.