Correlation Between Fidelity Value and Fidelity International
Can any of the company-specific risk be diversified away by investing in both Fidelity Value and Fidelity 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 Value and Fidelity International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Value ETF and Fidelity International Value, you can compare the effects of market volatilities on Fidelity Value and Fidelity 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 Value with a short position of Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Value and Fidelity International.
Diversification Opportunities for Fidelity Value and Fidelity International
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 Value ETF and Fidelity International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and Fidelity Value 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 Value ETF are associated (or correlated) with Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of Fidelity Value i.e., Fidelity Value and Fidelity International go up and down completely randomly.
Pair Corralation between Fidelity Value and Fidelity International
Assuming the 90 days trading horizon Fidelity Value ETF is expected to generate 1.24 times more return on investment than Fidelity International. However, Fidelity Value is 1.24 times more volatile than Fidelity International Value. It trades about 0.25 of its potential returns per unit of risk. Fidelity International Value is currently generating about -0.05 per unit of risk. If you would invest 1,770 in Fidelity Value ETF on August 29, 2024 and sell it today you would earn a total of 287.00 from holding Fidelity Value ETF or generate 16.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Value ETF vs. Fidelity International Value
Performance |
| Timeline |
| Fidelity Value ETF |
| Fidelity International |
Fidelity Value and Fidelity International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Value and Fidelity International
The main advantage of trading using opposite Fidelity Value and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Value position performs unexpectedly, Fidelity 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 Fidelity International will offset losses from the drop in Fidelity International's long position.| Fidelity Value vs. Fidelity Canadian Value | Fidelity Value vs. Fidelity High Quality | Fidelity Value vs. Fidelity International Value | Fidelity Value vs. Fidelity Canadian High |
| Fidelity International vs. BMO SP 500 | Fidelity International vs. BMO MSCI Emerging | Fidelity International vs. BMO Global Infrastructure | Fidelity International vs. BMO MSCI EAFE |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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