Correlation Between Fidelity International and Fidelity Value
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Fidelity Value 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 International and Fidelity Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity International Value and Fidelity Value ETF, you can compare the effects of market volatilities on Fidelity International and Fidelity Value 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 International with a short position of Fidelity Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Fidelity Value.
Diversification Opportunities for Fidelity International and Fidelity Value
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fidelity and Fidelity is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Value and Fidelity Value ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Value ETF and Fidelity 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 Fidelity International Value are associated (or correlated) with Fidelity Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Value ETF has no effect on the direction of Fidelity International i.e., Fidelity International and Fidelity Value go up and down completely randomly.
Pair Corralation between Fidelity International and Fidelity Value
Assuming the 90 days trading horizon Fidelity International is expected to generate 3.19 times less return on investment than Fidelity Value. But when comparing it to its historical volatility, Fidelity International Value is 1.08 times less risky than Fidelity Value. It trades about 0.05 of its potential returns per unit of risk. Fidelity Value ETF is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,427 in Fidelity Value ETF on August 29, 2024 and sell it today you would earn a total of 623.00 from holding Fidelity Value ETF or generate 43.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International Value vs. Fidelity Value ETF
Performance |
| Timeline |
| Fidelity International |
| Fidelity Value ETF |
Fidelity International and Fidelity Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Fidelity Value
The main advantage of trading using opposite Fidelity International and Fidelity Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Fidelity Value 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 Value will offset losses from the drop in Fidelity Value's long position.| Fidelity International vs. BMO SP 500 | Fidelity International vs. BMO MSCI Emerging | Fidelity International vs. BMO Global Infrastructure | Fidelity International vs. BMO MSCI EAFE |
| Fidelity Value vs. Fidelity Canadian Value | Fidelity Value vs. Fidelity High Quality | Fidelity Value vs. Fidelity International Value | Fidelity Value vs. Fidelity Canadian High |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |