Correlation Between Fidelity Momentum and Fidelity Global
Can any of the company-specific risk be diversified away by investing in both Fidelity Momentum and Fidelity Global 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 Momentum and Fidelity Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Momentum ETF and Fidelity Global Value, you can compare the effects of market volatilities on Fidelity Momentum and Fidelity Global 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 Momentum with a short position of Fidelity Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Momentum and Fidelity Global.
Diversification Opportunities for Fidelity Momentum and Fidelity Global
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fidelity and Fidelity is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Momentum ETF and Fidelity Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Value and Fidelity Momentum 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 Momentum ETF are associated (or correlated) with Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Value has no effect on the direction of Fidelity Momentum i.e., Fidelity Momentum and Fidelity Global go up and down completely randomly.
Pair Corralation between Fidelity Momentum and Fidelity Global
Assuming the 90 days trading horizon Fidelity Momentum ETF is expected to generate 0.65 times more return on investment than Fidelity Global. However, Fidelity Momentum ETF is 1.55 times less risky than Fidelity Global. It trades about 0.35 of its potential returns per unit of risk. Fidelity Global Value is currently generating about -0.31 per unit of risk. If you would invest 1,544 in Fidelity Momentum ETF on August 30, 2024 and sell it today you would earn a total of 207.00 from holding Fidelity Momentum ETF or generate 13.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Momentum ETF vs. Fidelity Global Value
Performance |
| Timeline |
| Fidelity Momentum ETF |
| Fidelity Global Value |
Fidelity Momentum and Fidelity Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Momentum and Fidelity Global
The main advantage of trading using opposite Fidelity Momentum and Fidelity Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Momentum position performs unexpectedly, Fidelity Global 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 Global will offset losses from the drop in Fidelity Global's long position.| Fidelity Momentum vs. iShares SPTSX 60 | Fidelity Momentum vs. iShares Core SP | Fidelity Momentum vs. iShares Core SPTSX | Fidelity Momentum vs. BMO Aggregate Bond |
| Fidelity Global vs. iShares SPTSX 60 | Fidelity Global vs. iShares Core SP | Fidelity Global vs. iShares Core SPTSX | Fidelity Global vs. BMO Aggregate Bond |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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