Correlation Between Fidelity Emerging and Fidelity Value
Can any of the company-specific risk be diversified away by investing in both Fidelity Emerging and Fidelity Value 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 Emerging and Fidelity Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Emerging Markets and Fidelity Value Fund, you can compare the effects of market volatilities on Fidelity Emerging and Fidelity Value 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 Emerging with a short position of Fidelity Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Emerging and Fidelity Value.
Diversification Opportunities for Fidelity Emerging and Fidelity Value
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and FIDELITY is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Emerging Markets and Fidelity Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Value and Fidelity Emerging 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 Emerging Markets are associated (or correlated) with Fidelity Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Value has no effect on the direction of Fidelity Emerging i.e., Fidelity Emerging and Fidelity Value go up and down completely randomly.
Pair Corralation between Fidelity Emerging and Fidelity Value
Assuming the 90 days horizon Fidelity Emerging Markets is expected to under-perform the Fidelity Value. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Emerging Markets is 1.19 times less risky than Fidelity Value. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Fidelity Value Fund is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,596 in Fidelity Value Fund on August 27, 2024 and sell it today you would earn a total of 118.00 from holding Fidelity Value Fund or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Emerging Markets vs. Fidelity Value Fund
Performance |
| Timeline |
| Fidelity Emerging Markets |
| Fidelity Value |
Fidelity Emerging and Fidelity Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Emerging and Fidelity Value
The main advantage of trading using opposite Fidelity Emerging and Fidelity Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Emerging position performs unexpectedly, Fidelity Value 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 Value will offset losses from the drop in Fidelity Value's long position.| Fidelity Emerging vs. Fidelity Emerging Asia | Fidelity Emerging vs. Fidelity Canada Fund | Fidelity Emerging vs. Fidelity China Region | Fidelity Emerging vs. Fidelity Pacific Basin |
| Fidelity Value vs. Fidelity Contrafund | Fidelity Value vs. Fidelity Diversified International | Fidelity Value vs. Fidelity Growth Pany | Fidelity Value vs. Fidelity Mid Cap Stock |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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