Correlation Between Fidelity Contrafund and Causeway International
Can any of the company-specific risk be diversified away by investing in both Fidelity Contrafund and Causeway International 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 Contrafund and Causeway International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Contrafund and Causeway International Value, you can compare the effects of market volatilities on Fidelity Contrafund and Causeway International 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 Contrafund with a short position of Causeway International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Contrafund and Causeway International.
Diversification Opportunities for Fidelity Contrafund and Causeway International
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Causeway is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Contrafund and Causeway International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Causeway International and Fidelity Contrafund 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 Contrafund are associated (or correlated) with Causeway International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Causeway International has no effect on the direction of Fidelity Contrafund i.e., Fidelity Contrafund and Causeway International go up and down completely randomly.
Pair Corralation between Fidelity Contrafund and Causeway International
Assuming the 90 days horizon Fidelity Contrafund is expected to generate 1.16 times more return on investment than Causeway International. However, Fidelity Contrafund is 1.16 times more volatile than Causeway International Value. It trades about 0.1 of its potential returns per unit of risk. Causeway International Value is currently generating about -0.01 per unit of risk. If you would invest 1,947 in Fidelity Contrafund on September 1, 2024 and sell it today you would earn a total of 247.00 from holding Fidelity Contrafund or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Fidelity Contrafund vs. Causeway International Value
Performance |
| Timeline |
| Fidelity Contrafund |
| Causeway International |
Fidelity Contrafund and Causeway International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Contrafund and Causeway International
The main advantage of trading using opposite Fidelity Contrafund and Causeway International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Contrafund position performs unexpectedly, Causeway International 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 Causeway International will offset losses from the drop in Causeway International's long position.| Fidelity Contrafund vs. Fidelity Low Priced Stock | Fidelity Contrafund vs. Fidelity Growth Pany | Fidelity Contrafund vs. Fidelity Magellan Fund | Fidelity Contrafund vs. Fidelity Diversified International |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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