Correlation Between Fidelity Growth and Growth Fund

By analyzing existing cross correlation between Fidelity Growth Discovery and The Growth Fund, you can compare the effects of market volatilities on Fidelity Growth and Growth 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 Growth with a short position of Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Growth and Growth Fund.
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Can any of the company-specific risk be diversified away by investing in both Fidelity Growth and Growth 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 Growth and Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for Fidelity Growth and Growth Fund

0.0
  Correlation Coefficient
Fidelity Growth Discovery
Growth Fund

Pay attention - limited upside

The 3 months correlation between Fidelity and Growth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Growth Discovery and The Growth Fund in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund and Fidelity Growth 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 Growth Discovery are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Fidelity Growth i.e., Fidelity Growth and Growth Fund go up and down completely randomly.

Pair Corralation between Fidelity Growth and Growth Fund

If you would invest  4,691  in The Growth Fund on October 29, 2021 and sell it today you would earn a total of  1,017  from holding The Growth Fund or generate 21.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.2%
ValuesDaily Returns

Fidelity Growth Discovery  vs.  The Growth Fund

 Performance (%) 
      Timeline 
Fidelity Growth Discovery 
Fidelity Performance
0 of 100
Over the last 90 days Fidelity Growth Discovery has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Fidelity Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Growth Fund 
Growth Performance
0 of 100
Over the last 90 days The Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in February 2022. The current disturbance may also be a sign of long term up-swing for the fund investors.

Fidelity Growth and Growth Fund Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Fidelity Growth and Growth Fund

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

Fidelity Growth Discovery

Pair trading matchups for Fidelity Growth

Twitter vs. Fidelity Growth
Ford vs. Fidelity Growth
GM vs. Fidelity Growth
Visa vs. Fidelity Growth
Salesforce vs. Fidelity Growth
Sentinelone Inc vs. Fidelity Growth
Microsoft Corp vs. Fidelity Growth
Citigroup vs. Fidelity Growth
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Fidelity Growth as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Fidelity Growth's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Fidelity Growth's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Fidelity Growth Discovery.
The idea behind Fidelity Growth Discovery and The Growth 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.
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 Global Correlations module to find global opportunities by holding instruments from different markets.

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