Correlation Between Fidelity Crypto and IShares Emergent

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Can any of the company-specific risk be diversified away by investing in both Fidelity Crypto and IShares Emergent 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 Crypto and IShares Emergent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Crypto Industry and iShares Emergent Food, you can compare the effects of market volatilities on Fidelity Crypto and IShares Emergent 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 Crypto with a short position of IShares Emergent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Crypto and IShares Emergent.

Diversification Opportunities for Fidelity Crypto and IShares Emergent

FidelityISharesDiversified AwayFidelityISharesDiversified Away100%
0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Fidelity and IShares is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Crypto Industry and iShares Emergent Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Emergent Food and Fidelity Crypto 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 Crypto Industry are associated (or correlated) with IShares Emergent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Emergent Food has no effect on the direction of Fidelity Crypto i.e., Fidelity Crypto and IShares Emergent go up and down completely randomly.

Pair Corralation between Fidelity Crypto and IShares Emergent

Given the investment horizon of 90 days Fidelity Crypto Industry is expected to under-perform the IShares Emergent. In addition to that, Fidelity Crypto is 3.39 times more volatile than iShares Emergent Food. It trades about -0.24 of its total potential returns per unit of risk. iShares Emergent Food is currently generating about -0.13 per unit of volatility. If you would invest  2,115  in iShares Emergent Food on November 25, 2024 and sell it today you would lose (50.00) from holding iShares Emergent Food or give up 2.36% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Fidelity Crypto Industry  vs.  iShares Emergent Food

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505101520
JavaScript chart by amCharts 3.21.15FDIG IVEG
       Timeline  
Fidelity Crypto Industry 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Fidelity Crypto Industry has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's forward indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb32343638404244
iShares Emergent Food 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days iShares Emergent Food has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, IShares Emergent is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb19.52020.52121.5

Fidelity Crypto and IShares Emergent Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.91-4.43-2.94-1.46-0.02411.372.824.265.717.15 0.10.20.30.40.5
JavaScript chart by amCharts 3.21.15FDIG IVEG
       Returns  

Pair Trading with Fidelity Crypto and IShares Emergent

The main advantage of trading using opposite Fidelity Crypto and IShares Emergent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Crypto position performs unexpectedly, IShares Emergent 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 Emergent will offset losses from the drop in IShares Emergent's long position.
The idea behind Fidelity Crypto Industry and iShares Emergent Food pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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