Correlation Between Fidelity High and IShares Core
Can any of the company-specific risk be diversified away by investing in both Fidelity High and IShares Core 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 High and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity High Dividend and iShares Core MSCI, you can compare the effects of market volatilities on Fidelity High and IShares Core 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 High with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity High and IShares Core.
Diversification Opportunities for Fidelity High and IShares Core
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and IShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity High Dividend and iShares Core MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core MSCI and Fidelity High 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 High Dividend are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core MSCI has no effect on the direction of Fidelity High i.e., Fidelity High and IShares Core go up and down completely randomly.
Pair Corralation between Fidelity High and IShares Core
Assuming the 90 days trading horizon Fidelity High Dividend is expected to generate 1.02 times more return on investment than IShares Core. However, Fidelity High is 1.02 times more volatile than iShares Core MSCI. It trades about 0.15 of its potential returns per unit of risk. iShares Core MSCI is currently generating about 0.14 per unit of risk. If you would invest 2,759 in Fidelity High Dividend on August 26, 2024 and sell it today you would earn a total of 1,092 from holding Fidelity High Dividend or generate 39.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity High Dividend vs. iShares Core MSCI
Performance |
| Timeline |
| Fidelity High Dividend |
| iShares Core MSCI |
Fidelity High and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity High and IShares Core
The main advantage of trading using opposite Fidelity High and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity High position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| Fidelity High vs. Fidelity Canadian High | Fidelity High vs. Fidelity International High | Fidelity High vs. Fidelity High Dividend | Fidelity High vs. Fidelity Dividend for |
| IShares Core vs. BMO Europe High | IShares Core vs. BMO Covered Call | IShares Core vs. BMO Covered Call | IShares Core vs. BMO Europe 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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