Correlation Between Dodge International and Fidelity International
Can any of the company-specific risk be diversified away by investing in both Dodge International and Fidelity International 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 Dodge International and Fidelity International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge International Stock and Fidelity International Value, you can compare the effects of market volatilities on Dodge International and Fidelity International 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 Dodge International with a short position of Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge International and Fidelity International.
Diversification Opportunities for Dodge International and Fidelity International
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dodge and Fidelity is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dodge International Stock and Fidelity International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and Dodge International 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 Dodge International Stock are associated (or correlated) with Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of Dodge International i.e., Dodge International and Fidelity International go up and down completely randomly.
Pair Corralation between Dodge International and Fidelity International
Assuming the 90 days horizon Dodge International Stock is expected to under-perform the Fidelity International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dodge International Stock is 1.12 times less risky than Fidelity International. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Fidelity International Value is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,075 in Fidelity International Value on September 3, 2024 and sell it today you would lose (3.00) from holding Fidelity International Value or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge International Stock vs. Fidelity International Value
Performance |
| Timeline |
| Dodge International Stock |
| Fidelity International |
Dodge International and Fidelity International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge International and Fidelity International
The main advantage of trading using opposite Dodge International and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge International position performs unexpectedly, Fidelity International 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 International will offset losses from the drop in Fidelity International's long position.| Dodge International vs. Dodge Stock Fund | Dodge International vs. Dodge Income Fund | Dodge International vs. Dodge Balanced Fund | Dodge International vs. The Fairholme 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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