Correlation Between Fidelity Canadian and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Fidelity Canadian and IShares MSCI 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 Canadian and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Canadian High and iShares MSCI EAFE, you can compare the effects of market volatilities on Fidelity Canadian and IShares MSCI 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 Canadian with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Canadian and IShares MSCI.
Diversification Opportunities for Fidelity Canadian and IShares MSCI
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and IShares is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Canadian High and iShares MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI EAFE and Fidelity Canadian 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 Canadian High are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI EAFE has no effect on the direction of Fidelity Canadian i.e., Fidelity Canadian and IShares MSCI go up and down completely randomly.
Pair Corralation between Fidelity Canadian and IShares MSCI
Assuming the 90 days trading horizon Fidelity Canadian High is expected to generate 0.66 times more return on investment than IShares MSCI. However, Fidelity Canadian High is 1.51 times less risky than IShares MSCI. It trades about 0.42 of its potential returns per unit of risk. iShares MSCI EAFE is currently generating about 0.11 per unit of risk. If you would invest 2,990 in Fidelity Canadian High on September 4, 2024 and sell it today you would earn a total of 107.00 from holding Fidelity Canadian High or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Canadian High vs. iShares MSCI EAFE
Performance |
| Timeline |
| Fidelity Canadian High |
| iShares MSCI EAFE |
Fidelity Canadian and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Canadian and IShares MSCI
The main advantage of trading using opposite Fidelity Canadian and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Canadian position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| Fidelity Canadian vs. Dynamic Active Global | Fidelity Canadian vs. Dynamic Active Dividend | Fidelity Canadian vs. Dynamic Active Preferred | Fidelity Canadian vs. Dynamic Active Crossover |
| IShares MSCI vs. Fidelity Canadian High | IShares MSCI vs. Fidelity High Dividend | IShares MSCI vs. Fidelity High Dividend | IShares MSCI vs. Fidelity Dividend for |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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