Correlation Between Schroders Investment and Fidelity China
Can any of the company-specific risk be diversified away by investing in both Schroders Investment and Fidelity China 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 Schroders Investment and Fidelity China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schroders Investment Trusts and Fidelity China Special, you can compare the effects of market volatilities on Schroders Investment and Fidelity China 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 Schroders Investment with a short position of Fidelity China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schroders Investment and Fidelity China.
Diversification Opportunities for Schroders Investment and Fidelity China
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Schroders and Fidelity is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Schroders Investment Trusts and Fidelity China Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity China Special and Schroders Investment 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 Schroders Investment Trusts are associated (or correlated) with Fidelity China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity China Special has no effect on the direction of Schroders Investment i.e., Schroders Investment and Fidelity China go up and down completely randomly.
Pair Corralation between Schroders Investment and Fidelity China
Assuming the 90 days trading horizon Schroders Investment Trusts is expected to generate 0.4 times more return on investment than Fidelity China. However, Schroders Investment Trusts is 2.5 times less risky than Fidelity China. It trades about 0.09 of its potential returns per unit of risk. Fidelity China Special is currently generating about -0.02 per unit of risk. If you would invest 47,600 in Schroders Investment Trusts on September 5, 2024 and sell it today you would earn a total of 700.00 from holding Schroders Investment Trusts or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schroders Investment Trusts vs. Fidelity China Special
Performance |
| Timeline |
| Schroders Investment |
| Fidelity China Special |
Schroders Investment and Fidelity China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schroders Investment and Fidelity China
The main advantage of trading using opposite Schroders Investment and Fidelity China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schroders Investment position performs unexpectedly, Fidelity China 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 China will offset losses from the drop in Fidelity China's long position.| Schroders Investment vs. SupplyMe Capital PLC | Schroders Investment vs. Lloyds Banking Group | Schroders Investment vs. Premier African Minerals | Schroders Investment vs. SANTANDER UK 8 |
| Fidelity China vs. SupplyMe Capital PLC | Fidelity China vs. Lloyds Banking Group | Fidelity China vs. Premier African Minerals | Fidelity China vs. SANTANDER UK 8 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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