Correlation Between Fidelity Global and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Fidelity Global and Dow Jones 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 Global and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Global Modity and Dow Jones Industrial, you can compare the effects of market volatilities on Fidelity Global and Dow Jones 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 Global with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Global and Dow Jones.
Diversification Opportunities for Fidelity Global and Dow Jones
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Dow is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Global Modity and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Fidelity Global 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 Global Modity are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Fidelity Global i.e., Fidelity Global and Dow Jones go up and down completely randomly.
Pair Corralation between Fidelity Global and Dow Jones
Assuming the 90 days horizon Fidelity Global is expected to generate 18.19 times less return on investment than Dow Jones. In addition to that, Fidelity Global is 1.34 times more volatile than Dow Jones Industrial. It trades about 0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of volatility. If you would invest 3,857,103 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 633,962 from holding Dow Jones Industrial or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Fidelity Global Modity vs. Dow Jones Industrial
Performance |
| Timeline |
Fidelity Global and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Fidelity Global Modity
Pair trading matchups for Fidelity Global
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Fidelity Global and Dow Jones
The main advantage of trading using opposite Fidelity Global and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Global position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Fidelity Global vs. Materials Portfolio Materials | Fidelity Global vs. Fidelity Natural Resources | Fidelity Global vs. Utilities Portfolio Utilities | Fidelity Global vs. Automotive Portfolio Automotive |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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