Correlation Between Fidelity New and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Fidelity New and Barings 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 Barings 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 Barings Emerging Markets, you can compare the effects of market volatilities on Fidelity New and Barings 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 Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Barings Emerging.
Diversification Opportunities for Fidelity New and Barings Emerging
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Barings is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Markets and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets 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 Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Fidelity New i.e., Fidelity New and Barings Emerging go up and down completely randomly.
Pair Corralation between Fidelity New and Barings Emerging
Assuming the 90 days horizon Fidelity New Markets is expected to generate 1.06 times more return on investment than Barings Emerging. However, Fidelity New is 1.06 times more volatile than Barings Emerging Markets. It trades about 0.09 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.07 per unit of risk. If you would invest 1,059 in Fidelity New Markets on August 24, 2024 and sell it today you would earn a total of 213.00 from holding Fidelity New Markets or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity New Markets vs. Barings Emerging Markets
Performance |
| Timeline |
| Fidelity New Markets |
| Barings Emerging Markets |
Fidelity New and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity New and Barings Emerging
The main advantage of trading using opposite Fidelity New and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity New position performs unexpectedly, Barings 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 Barings Emerging will offset losses from the drop in Barings Emerging's long position.| Fidelity New vs. Large Cap Value Profund | Fidelity New vs. Americafirst Large Cap | Fidelity New vs. Virtus Nfj Large Cap | Fidelity New vs. Touchstone Large Cap |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |