Correlation Between Fidelity Enduring and Fidelity Worldwide
Can any of the company-specific risk be diversified away by investing in both Fidelity Enduring and Fidelity Worldwide 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 Enduring and Fidelity Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Enduring Opportunities and Fidelity Worldwide Fund, you can compare the effects of market volatilities on Fidelity Enduring and Fidelity Worldwide 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 Enduring with a short position of Fidelity Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Enduring and Fidelity Worldwide.
Diversification Opportunities for Fidelity Enduring and Fidelity Worldwide
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Enduring Opportunitie and Fidelity Worldwide Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Worldwide and Fidelity Enduring 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 Enduring Opportunities are associated (or correlated) with Fidelity Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Worldwide has no effect on the direction of Fidelity Enduring i.e., Fidelity Enduring and Fidelity Worldwide go up and down completely randomly.
Pair Corralation between Fidelity Enduring and Fidelity Worldwide
Assuming the 90 days horizon Fidelity Enduring is expected to generate 1.29 times less return on investment than Fidelity Worldwide. But when comparing it to its historical volatility, Fidelity Enduring Opportunities is 1.36 times less risky than Fidelity Worldwide. It trades about 0.3 of its potential returns per unit of risk. Fidelity Worldwide Fund is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,775 in Fidelity Worldwide Fund on September 2, 2024 and sell it today you would earn a total of 195.00 from holding Fidelity Worldwide Fund or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Enduring Opportunitie vs. Fidelity Worldwide Fund
Performance |
| Timeline |
| Fidelity Enduring |
| Fidelity Worldwide |
Fidelity Enduring and Fidelity Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Enduring and Fidelity Worldwide
The main advantage of trading using opposite Fidelity Enduring and Fidelity Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Enduring position performs unexpectedly, Fidelity Worldwide 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 Worldwide will offset losses from the drop in Fidelity Worldwide's long position.| Fidelity Enduring vs. Fidelity Worldwide Fund | Fidelity Enduring vs. Fidelity International Small | Fidelity Enduring vs. Fidelity International Small |
| Fidelity Worldwide vs. Fidelity International Small | Fidelity Worldwide vs. Fidelity International Small |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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