Correlation Between Fidelity Canada and Fidelity Flex
Can any of the company-specific risk be diversified away by investing in both Fidelity Canada and Fidelity Flex 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 Flex 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 Flex Mid, you can compare the effects of market volatilities on Fidelity Canada and Fidelity Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Canada and Fidelity Flex.
Diversification Opportunities for Fidelity Canada and Fidelity Flex
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Canada Fund and Fidelity Flex Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Flex Mid 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Flex Mid has no effect on the direction of Fidelity Canada i.e., Fidelity Canada and Fidelity Flex go up and down completely randomly.
Pair Corralation between Fidelity Canada and Fidelity Flex
Assuming the 90 days horizon Fidelity Canada is expected to generate 1.61 times less return on investment than Fidelity Flex. But when comparing it to its historical volatility, Fidelity Canada Fund is 1.12 times less risky than Fidelity Flex. It trades about 0.11 of its potential returns per unit of risk. Fidelity Flex Mid is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,722 in Fidelity Flex Mid on August 30, 2024 and sell it today you would earn a total of 310.00 from holding Fidelity Flex Mid or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Canada Fund vs. Fidelity Flex Mid
Performance |
| Timeline |
| Fidelity Canada |
| Fidelity Flex Mid |
Fidelity Canada and Fidelity Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Canada and Fidelity Flex
The main advantage of trading using opposite Fidelity Canada and Fidelity Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Canada position performs unexpectedly, Fidelity Flex 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 Flex will offset losses from the drop in Fidelity Flex's long position.| Fidelity Canada vs. Oklahoma College Savings | Fidelity Canada vs. Blackrock Inflation Protected | Fidelity Canada vs. Ab Bond Inflation | Fidelity Canada vs. Ab Municipal Bond |
| Fidelity Flex vs. Fidelity Freedom 2015 | Fidelity Flex vs. Fidelity Puritan Fund | Fidelity Flex vs. Fidelity Puritan Fund | Fidelity Flex vs. Fidelity Pennsylvania Municipal |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |