Correlation Between Fidelity China and Wasatch Greater
Can any of the company-specific risk be diversified away by investing in both Fidelity China and Wasatch Greater 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 Wasatch Greater 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 Wasatch Greater China, you can compare the effects of market volatilities on Fidelity China and Wasatch Greater 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 Wasatch Greater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity China and Wasatch Greater.
Diversification Opportunities for Fidelity China and Wasatch Greater
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Wasatch is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity China Region and Wasatch Greater China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Greater China 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 Wasatch Greater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Greater China has no effect on the direction of Fidelity China i.e., Fidelity China and Wasatch Greater go up and down completely randomly.
Pair Corralation between Fidelity China and Wasatch Greater
Assuming the 90 days horizon Fidelity China Region is expected to generate 0.91 times more return on investment than Wasatch Greater. However, Fidelity China Region is 1.1 times less risky than Wasatch Greater. It trades about 0.04 of its potential returns per unit of risk. Wasatch Greater China is currently generating about -0.02 per unit of risk. If you would invest 3,259 in Fidelity China Region on September 1, 2024 and sell it today you would earn a total of 590.00 from holding Fidelity China Region or generate 18.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Fidelity China Region vs. Wasatch Greater China
Performance |
| Timeline |
| Fidelity China Region |
| Wasatch Greater China |
Fidelity China and Wasatch Greater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity China and Wasatch Greater
The main advantage of trading using opposite Fidelity China and Wasatch Greater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity China position performs unexpectedly, Wasatch Greater 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 Wasatch Greater will offset losses from the drop in Wasatch Greater's long position.| Fidelity China vs. Fidelity Freedom 2015 | Fidelity China vs. Fidelity Puritan Fund | Fidelity China vs. Fidelity Puritan Fund | Fidelity China vs. Fidelity Pennsylvania Municipal |
| Wasatch Greater vs. Doubleline Emerging Markets | Wasatch Greater vs. Barings Emerging Markets | Wasatch Greater vs. Goldman Sachs Emerging | Wasatch Greater vs. Eagle Mlp Strategy |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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