Correlation Between Invesco Asia and Fidelity Europe
Can any of the company-specific risk be diversified away by investing in both Invesco Asia and Fidelity Europe 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 Invesco Asia and Fidelity Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Asia Pacific and Fidelity Europe Fund, you can compare the effects of market volatilities on Invesco Asia and Fidelity Europe 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 Invesco Asia with a short position of Fidelity Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Asia and Fidelity Europe.
Diversification Opportunities for Invesco Asia and Fidelity Europe
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INVESCO and Fidelity is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Asia Pacific and Fidelity Europe Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Europe and Invesco Asia 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 Invesco Asia Pacific are associated (or correlated) with Fidelity Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Europe has no effect on the direction of Invesco Asia i.e., Invesco Asia and Fidelity Europe go up and down completely randomly.
Pair Corralation between Invesco Asia and Fidelity Europe
Assuming the 90 days horizon Invesco Asia Pacific is expected to under-perform the Fidelity Europe. In addition to that, Invesco Asia is 1.1 times more volatile than Fidelity Europe Fund. It trades about -0.05 of its total potential returns per unit of risk. Fidelity Europe Fund is currently generating about 0.36 per unit of volatility. If you would invest 3,460 in Fidelity Europe Fund on December 2, 2024 and sell it today you would earn a total of 399.00 from holding Fidelity Europe Fund or generate 11.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Asia Pacific vs. Fidelity Europe Fund
Performance |
| Timeline |
| Invesco Asia Pacific |
| Fidelity Europe |
Invesco Asia and Fidelity Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Asia and Fidelity Europe
The main advantage of trading using opposite Invesco Asia and Fidelity Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Asia position performs unexpectedly, Fidelity Europe 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 Europe will offset losses from the drop in Fidelity Europe's long position.| Invesco Asia vs. Touchstone Sands Capital | Invesco Asia vs. L Abbett Growth | Invesco Asia vs. Multimanager Lifestyle Growth | Invesco Asia vs. Crafword Dividend Growth |
| Fidelity Europe vs. Fidelity Pacific Basin | Fidelity Europe vs. Fidelity Japan Fund | Fidelity Europe vs. Fidelity Investment Trust | Fidelity Europe vs. Fidelity Nordic Fund |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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