Correlation Between American Funds and Fidelity Global
Can any of the company-specific risk be diversified away by investing in both American Funds and Fidelity Global 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 American Funds and Fidelity Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Fundamental and Fidelity Global Bond, you can compare the effects of market volatilities on American Funds and Fidelity Global 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 American Funds with a short position of Fidelity Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Fidelity Global.
Diversification Opportunities for American Funds and Fidelity Global
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Fidelity is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and Fidelity Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Bond and American Funds 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 American Funds Fundamental are associated (or correlated) with Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Bond has no effect on the direction of American Funds i.e., American Funds and Fidelity Global go up and down completely randomly.
Pair Corralation between American Funds and Fidelity Global
Assuming the 90 days horizon American Funds Fundamental is expected to generate 4.96 times more return on investment than Fidelity Global. However, American Funds is 4.96 times more volatile than Fidelity Global Bond. It trades about 0.07 of its potential returns per unit of risk. Fidelity Global Bond is currently generating about 0.08 per unit of risk. If you would invest 7,653 in American Funds Fundamental on November 3, 2024 and sell it today you would earn a total of 765.00 from holding American Funds Fundamental or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Fundamental vs. Fidelity Global Bond
Performance |
| Timeline |
| American Funds Funda |
| Fidelity Global Bond |
American Funds and Fidelity Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Fidelity Global
The main advantage of trading using opposite American Funds and Fidelity Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Fidelity Global 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 Global will offset losses from the drop in Fidelity Global's long position.| American Funds vs. Federated Emerging Market | American Funds vs. Siit Emerging Markets | American Funds vs. Mid Cap 15x Strategy | American Funds vs. Ashmore Emerging Markets |
| Fidelity Global vs. Fidelity Porate Bond | Fidelity Global vs. Fidelity Global Equity | Fidelity Global vs. Fidelity Total International | Fidelity Global vs. Fidelity Advisor Stock |
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 the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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