Correlation Between Fidelity MSCI and VanEck Oil
Can any of the company-specific risk be diversified away by investing in both Fidelity MSCI and VanEck Oil 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 VanEck Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity MSCI Energy and VanEck Oil Refiners, you can compare the effects of market volatilities on Fidelity MSCI and VanEck Oil 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 VanEck Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity MSCI and VanEck Oil.
Diversification Opportunities for Fidelity MSCI and VanEck Oil
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and VanEck is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity MSCI Energy and VanEck Oil Refiners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Oil Refiners 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 Energy are associated (or correlated) with VanEck Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Oil Refiners has no effect on the direction of Fidelity MSCI i.e., Fidelity MSCI and VanEck Oil go up and down completely randomly.
Pair Corralation between Fidelity MSCI and VanEck Oil
Given the investment horizon of 90 days Fidelity MSCI Energy is expected to generate 1.16 times more return on investment than VanEck Oil. However, Fidelity MSCI is 1.16 times more volatile than VanEck Oil Refiners. It trades about 0.08 of its potential returns per unit of risk. VanEck Oil Refiners is currently generating about -0.01 per unit of risk. If you would invest 2,165 in Fidelity MSCI Energy on September 2, 2024 and sell it today you would earn a total of 475.00 from holding Fidelity MSCI Energy or generate 21.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity MSCI Energy vs. VanEck Oil Refiners
Performance |
| Timeline |
| Fidelity MSCI Energy |
| VanEck Oil Refiners |
Fidelity MSCI and VanEck Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity MSCI and VanEck Oil
The main advantage of trading using opposite Fidelity MSCI and VanEck Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity MSCI position performs unexpectedly, VanEck Oil 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 VanEck Oil will offset losses from the drop in VanEck Oil's long position.| Fidelity MSCI vs. Fidelity MSCI Financials | Fidelity MSCI vs. Fidelity MSCI Utilities | Fidelity MSCI vs. Fidelity MSCI Health | Fidelity MSCI vs. Fidelity MSCI Consumer |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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