Correlation Between Fidelity Canada and Fidelity Growth
Can any of the company-specific risk be diversified away by investing in both Fidelity Canada and Fidelity Growth 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 Fidelity Canada and Fidelity Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Canada Fund and Fidelity Growth Discovery, you can compare the effects of market volatilities on Fidelity Canada and Fidelity Growth 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 Fidelity Canada with a short position of Fidelity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Canada and Fidelity Growth.
Diversification Opportunities for Fidelity Canada and Fidelity Growth
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FIDELITY and Fidelity is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Canada Fund and Fidelity Growth Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Growth Discovery and Fidelity Canada 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 Fidelity Canada Fund are associated (or correlated) with Fidelity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Growth Discovery has no effect on the direction of Fidelity Canada i.e., Fidelity Canada and Fidelity Growth go up and down completely randomly.
Pair Corralation between Fidelity Canada and Fidelity Growth
Assuming the 90 days horizon Fidelity Canada Fund is expected to under-perform the Fidelity Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Canada Fund is 1.16 times less risky than Fidelity Growth. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Fidelity Growth Discovery is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,939 in Fidelity Growth Discovery on December 4, 2024 and sell it today you would earn a total of 31.00 from holding Fidelity Growth Discovery or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Fidelity Canada Fund vs. Fidelity Growth Discovery
Performance |
| Timeline |
| Fidelity Canada |
| Fidelity Growth Discovery |
Fidelity Canada and Fidelity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Canada and Fidelity Growth
The main advantage of trading using opposite Fidelity Canada and Fidelity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Canada position performs unexpectedly, Fidelity Growth 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 Growth will offset losses from the drop in Fidelity Growth's long position.| Fidelity Canada vs. Thrivent Natural Resources | Fidelity Canada vs. Calvert Global Energy | Fidelity Canada vs. Hennessy Bp Energy | Fidelity Canada vs. Gamco Natural Resources |
| Fidelity Growth vs. Fidelity Leveraged Pany | Fidelity Growth vs. Fidelity Dividend Growth | Fidelity Growth vs. Fidelity Value Fund | Fidelity Growth vs. Fidelity Blue Chip |
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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