Correlation Between Fidelity China and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Fidelity China and Eaton Vance 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 Eaton Vance 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 Eaton Vance Greater, you can compare the effects of market volatilities on Fidelity China and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity China and Eaton Vance.
Diversification Opportunities for Fidelity China and Eaton Vance
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Eaton is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity China Region and Eaton Vance Greater in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Greater 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Greater has no effect on the direction of Fidelity China i.e., Fidelity China and Eaton Vance go up and down completely randomly.
Pair Corralation between Fidelity China and Eaton Vance
Assuming the 90 days horizon Fidelity China Region is expected to generate 0.74 times more return on investment than Eaton Vance. However, Fidelity China Region is 1.36 times less risky than Eaton Vance. It trades about 0.06 of its potential returns per unit of risk. Eaton Vance Greater is currently generating about 0.0 per unit of risk. If you would invest 3,277 in Fidelity China Region on September 12, 2024 and sell it today you would earn a total of 851.00 from holding Fidelity China Region or generate 25.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity China Region vs. Eaton Vance Greater
Performance |
| Timeline |
| Fidelity China Region |
| Eaton Vance Greater |
Fidelity China and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity China and Eaton Vance
The main advantage of trading using opposite Fidelity China and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity China position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance'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 |
| Eaton Vance vs. Fidelity China Region | Eaton Vance vs. Fidelity China Region | Eaton Vance vs. Fidelity China Region | Eaton Vance 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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