Correlation Between Schwab Fundamental and Fidelity Select

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

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

Diversification Opportunities for Schwab Fundamental and Fidelity Select

0.24

Correlation Coefficient

Schwab Fundamental  Fidelity Select

Modest diversification

The 3 months correlation between Schwab and Fidelity is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Schwab Fundamental Small and Fidelity Select Portfolios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Select Port and Schwab Fundamental 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 Schwab Fundamental Small are associated (or correlated) with Fidelity Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Select Port has no effect on the direction of Schwab Fundamental i.e., Schwab Fundamental and Fidelity Select go up and down completely randomly.

Pair Corralation between Schwab Fundamental and Fidelity Select

Assuming the 90 days horizon Schwab Fundamental is expected to generate 1.74 times less return on investment than Fidelity Select. But when comparing it to its historical volatility, Schwab Fundamental Small is 1.03 times less risky than Fidelity Select. It trades about 0.04 of its potential returns per unit of risk. Fidelity Select Portfolios is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  6,111  in Fidelity Select Portfolios on October 8, 2025 and sell it today you would earn a total of  263.00  from holding Fidelity Select Portfolios or generate 4.3% return on investment over 90 days.

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

Schwab Fundamental Small  vs.  Fidelity Select Portfolios

Schwab Fundamental Small

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Schwab Fundamental Small are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Schwab Fundamental is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Select Port

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Select Portfolios are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Schwab Fundamental and Fidelity Select

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

The idea behind Schwab Fundamental Small and Fidelity Select Portfolios 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.