Correlation Between Fidelity China and Rbc China
Can any of the company-specific risk be diversified away by investing in both Fidelity China and Rbc China 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 China and Rbc China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity China Region and Rbc China Equity, you can compare the effects of market volatilities on Fidelity China and Rbc China 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 China with a short position of Rbc China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity China and Rbc China.
Diversification Opportunities for Fidelity China and Rbc China
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Rbc is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity China Region and Rbc China Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc China Equity and Fidelity China 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 China Region are associated (or correlated) with Rbc China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc China Equity has no effect on the direction of Fidelity China i.e., Fidelity China and Rbc China go up and down completely randomly.
Pair Corralation between Fidelity China and Rbc China
Assuming the 90 days horizon Fidelity China Region is expected to under-perform the Rbc China. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity China Region is 1.68 times less risky than Rbc China. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Rbc China Equity is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 934.00 in Rbc China Equity on September 12, 2024 and sell it today you would lose (22.00) from holding Rbc China Equity or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity China Region vs. Rbc China Equity
Performance |
| Timeline |
| Fidelity China Region |
| Rbc China Equity |
Fidelity China and Rbc China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity China and Rbc China
The main advantage of trading using opposite Fidelity China and Rbc China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity China position performs unexpectedly, Rbc China 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 Rbc China will offset losses from the drop in Rbc China's long position.| Fidelity China vs. Fidelity China Region | Fidelity China vs. Fidelity China Region | Fidelity China vs. Fidelity China Region | Fidelity China vs. Matthews China Fund |
| Rbc China vs. Fidelity China Region | Rbc China vs. Fidelity China Region | Rbc China vs. Fidelity China Region | Rbc China vs. Fidelity China Region |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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