Correlation Between Fidelity Global and Fidelity International
Can any of the company-specific risk be diversified away by investing in both Fidelity Global and Fidelity International 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 Fidelity International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Global Equity and Fidelity International Value, you can compare the effects of market volatilities on Fidelity Global and Fidelity International 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 Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Global and Fidelity International.
Diversification Opportunities for Fidelity Global and Fidelity International
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Global Equity and Fidelity International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International 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 Equity are associated (or correlated) with Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of Fidelity Global i.e., Fidelity Global and Fidelity International go up and down completely randomly.
Pair Corralation between Fidelity Global and Fidelity International
Assuming the 90 days horizon Fidelity Global is expected to generate 1.32 times less return on investment than Fidelity International. But when comparing it to its historical volatility, Fidelity Global Equity is 1.42 times less risky than Fidelity International. It trades about 0.26 of its potential returns per unit of risk. Fidelity International Value is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,019 in Fidelity International Value on November 5, 2024 and sell it today you would earn a total of 39.00 from holding Fidelity International Value or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Global Equity vs. Fidelity International Value
Performance |
| Timeline |
| Fidelity Global Equity |
| Fidelity International |
Fidelity Global and Fidelity International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Global and Fidelity International
The main advantage of trading using opposite Fidelity Global and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Global position performs unexpectedly, Fidelity International 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 International will offset losses from the drop in Fidelity International's long position.| Fidelity Global vs. Fidelity Emerging Markets | Fidelity Global vs. Fidelity Total International | Fidelity Global vs. Fidelity International Value |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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