Correlation Between Fidelity New and Calvert Developed
Can any of the company-specific risk be diversified away by investing in both Fidelity New and Calvert Developed 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 Calvert Developed 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 Calvert Developed Market, you can compare the effects of market volatilities on Fidelity New and Calvert Developed 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 Calvert Developed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Calvert Developed.
Diversification Opportunities for Fidelity New and Calvert Developed
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Calvert is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Markets and Calvert Developed Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Developed 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 Calvert Developed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Developed Market has no effect on the direction of Fidelity New i.e., Fidelity New and Calvert Developed go up and down completely randomly.
Pair Corralation between Fidelity New and Calvert Developed
Assuming the 90 days horizon Fidelity New is expected to generate 1.41 times less return on investment than Calvert Developed. But when comparing it to its historical volatility, Fidelity New Markets is 2.77 times less risky than Calvert Developed. It trades about 0.47 of its potential returns per unit of risk. Calvert Developed Market is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,975 in Calvert Developed Market on November 9, 2024 and sell it today you would earn a total of 129.00 from holding Calvert Developed Market or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity New Markets vs. Calvert Developed Market
Performance |
| Timeline |
| Fidelity New Markets |
| Calvert Developed Market |
Fidelity New and Calvert Developed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity New and Calvert Developed
The main advantage of trading using opposite Fidelity New and Calvert Developed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity New position performs unexpectedly, Calvert Developed 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 Calvert Developed will offset losses from the drop in Calvert Developed's long position.| Fidelity New vs. Stone Ridge Diversified | Fidelity New vs. Guggenheim Diversified Income | Fidelity New vs. John Hancock Funds | Fidelity New vs. Aqr Diversified Arbitrage |
| Calvert Developed vs. Calvert Large Cap | Calvert Developed vs. Calvert Large Cap | Calvert Developed vs. Calvert Mid Cap | Calvert Developed vs. Calvert Short Duration |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |