Correlation Between Fidelity New and Federated Emerging
Can any of the company-specific risk be diversified away by investing in both Fidelity New and Federated Emerging 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 New and Federated Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity New Markets and Federated Emerging Market, you can compare the effects of market volatilities on Fidelity New and Federated Emerging 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 New with a short position of Federated Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Federated Emerging.
Diversification Opportunities for Fidelity New and Federated Emerging
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Federated is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Markets and Federated Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Emerging Market and Fidelity New 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 New Markets are associated (or correlated) with Federated Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Emerging Market has no effect on the direction of Fidelity New i.e., Fidelity New and Federated Emerging go up and down completely randomly.
Pair Corralation between Fidelity New and Federated Emerging
Assuming the 90 days horizon Fidelity New Markets is expected to generate 1.36 times more return on investment than Federated Emerging. However, Fidelity New is 1.36 times more volatile than Federated Emerging Market. It trades about 0.27 of its potential returns per unit of risk. Federated Emerging Market is currently generating about 0.23 per unit of risk. If you would invest 1,274 in Fidelity New Markets on November 27, 2024 and sell it today you would earn a total of 23.00 from holding Fidelity New Markets or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity New Markets vs. Federated Emerging Market
Performance |
| Timeline |
| Fidelity New Markets |
| Federated Emerging Market |
Fidelity New and Federated Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity New and Federated Emerging
The main advantage of trading using opposite Fidelity New and Federated Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity New position performs unexpectedly, Federated Emerging 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 Federated Emerging will offset losses from the drop in Federated Emerging's long position.| Fidelity New vs. T Rowe Price | Fidelity New vs. Ultrasmall Cap Profund Ultrasmall Cap | Fidelity New vs. Fidelity Small Cap | Fidelity New vs. T Rowe Price |
| Federated Emerging vs. Glg Intl Small | Federated Emerging vs. Guidemark E Fixed | Federated Emerging vs. Shelton Emerging Markets | Federated Emerging vs. Arrow Managed Futures |
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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