Correlation Between Fidelity MSCI and Invesco SP
Can any of the company-specific risk be diversified away by investing in both Fidelity MSCI and Invesco SP 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 MSCI and Invesco SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity MSCI Consumer and Invesco SP 500, you can compare the effects of market volatilities on Fidelity MSCI and Invesco SP 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 MSCI with a short position of Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity MSCI and Invesco SP.
Diversification Opportunities for Fidelity MSCI and Invesco SP
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Invesco is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity MSCI Consumer and Invesco SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP 500 and Fidelity MSCI 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 MSCI Consumer are associated (or correlated) with Invesco SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco SP 500 has no effect on the direction of Fidelity MSCI i.e., Fidelity MSCI and Invesco SP go up and down completely randomly.
Pair Corralation between Fidelity MSCI and Invesco SP
Given the investment horizon of 90 days Fidelity MSCI Consumer is expected to generate 1.87 times more return on investment than Invesco SP. However, Fidelity MSCI is 1.87 times more volatile than Invesco SP 500. It trades about 0.5 of its potential returns per unit of risk. Invesco SP 500 is currently generating about 0.19 per unit of risk. If you would invest 8,662 in Fidelity MSCI Consumer on September 1, 2024 and sell it today you would earn a total of 1,103 from holding Fidelity MSCI Consumer or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity MSCI Consumer vs. Invesco SP 500
Performance |
| Timeline |
| Fidelity MSCI Consumer |
| Invesco SP 500 |
Fidelity MSCI and Invesco SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity MSCI and Invesco SP
The main advantage of trading using opposite Fidelity MSCI and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity MSCI position performs unexpectedly, Invesco SP 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 Invesco SP will offset losses from the drop in Invesco SP's long position.| Fidelity MSCI vs. Invesco Dynamic Food | Fidelity MSCI vs. Invesco Dynamic Building | Fidelity MSCI vs. Invesco DWA Utilities | Fidelity MSCI vs. Aquagold International |
| Invesco SP vs. Consumer Discretionary Select | Invesco SP vs. Industrial Select Sector | Invesco SP vs. Utilities Select Sector | Invesco SP vs. Materials Select Sector |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |