Correlation Between Dimensional Core and Fidelity Limited
Can any of the company-specific risk be diversified away by investing in both Dimensional Core and Fidelity Limited 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 Dimensional Core and Fidelity Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional Core Equity and Fidelity Limited Term, you can compare the effects of market volatilities on Dimensional Core and Fidelity Limited 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 Dimensional Core with a short position of Fidelity Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional Core and Fidelity Limited.
Diversification Opportunities for Dimensional Core and Fidelity Limited
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dimensional and Fidelity is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional Core Equity and Fidelity Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Limited Term and Dimensional Core 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 Dimensional Core Equity are associated (or correlated) with Fidelity Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Limited Term has no effect on the direction of Dimensional Core i.e., Dimensional Core and Fidelity Limited go up and down completely randomly.
Pair Corralation between Dimensional Core and Fidelity Limited
Given the investment horizon of 90 days Dimensional Core Equity is expected to generate 7.19 times more return on investment than Fidelity Limited. However, Dimensional Core is 7.19 times more volatile than Fidelity Limited Term. It trades about 0.22 of its potential returns per unit of risk. Fidelity Limited Term is currently generating about -0.01 per unit of risk. If you would invest 3,465 in Dimensional Core Equity on August 30, 2024 and sell it today you would earn a total of 162.00 from holding Dimensional Core Equity or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimensional Core Equity vs. Fidelity Limited Term
Performance |
| Timeline |
| Dimensional Core Equity |
| Fidelity Limited Term |
Dimensional Core and Fidelity Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional Core and Fidelity Limited
The main advantage of trading using opposite Dimensional Core and Fidelity Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional Core position performs unexpectedly, Fidelity Limited 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 Limited will offset losses from the drop in Fidelity Limited's long position.| Dimensional Core vs. Dimensional Targeted Value | Dimensional Core vs. Dimensional World ex | Dimensional Core vs. Dimensional Small Cap | Dimensional Core vs. Dimensional Core Equity |
| Fidelity Limited vs. iShares 5 10 Year | Fidelity Limited vs. iShares 0 5 Year | Fidelity Limited vs. SPDR Barclays Short | Fidelity Limited vs. iShares Core Total |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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