Correlation Between Fidelity China and Fidelity Leveraged
Can any of the company-specific risk be diversified away by investing in both Fidelity China and Fidelity Leveraged 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 Fidelity Leveraged 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 Fidelity Leveraged Pany, you can compare the effects of market volatilities on Fidelity China and Fidelity Leveraged 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 Fidelity Leveraged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity China and Fidelity Leveraged.
Diversification Opportunities for Fidelity China and Fidelity Leveraged
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fidelity and Fidelity is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity China Region and Fidelity Leveraged Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Leveraged Pany 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 Fidelity Leveraged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Leveraged Pany has no effect on the direction of Fidelity China i.e., Fidelity China and Fidelity Leveraged go up and down completely randomly.
Pair Corralation between Fidelity China and Fidelity Leveraged
Assuming the 90 days horizon Fidelity China Region is expected to under-perform the Fidelity Leveraged. In addition to that, Fidelity China is 1.15 times more volatile than Fidelity Leveraged Pany. It trades about -0.16 of its total potential returns per unit of risk. Fidelity Leveraged Pany is currently generating about 0.2 per unit of volatility. If you would invest 3,925 in Fidelity Leveraged Pany on August 31, 2024 and sell it today you would earn a total of 217.00 from holding Fidelity Leveraged Pany or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity China Region vs. Fidelity Leveraged Pany
Performance |
| Timeline |
| Fidelity China Region |
| Fidelity Leveraged Pany |
Fidelity China and Fidelity Leveraged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity China and Fidelity Leveraged
The main advantage of trading using opposite Fidelity China and Fidelity Leveraged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity China position performs unexpectedly, Fidelity Leveraged 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 Fidelity Leveraged will offset losses from the drop in Fidelity Leveraged's long position.| Fidelity China vs. Fidelity Emerging Asia | Fidelity China vs. Fidelity Emerging Markets | Fidelity China vs. Fidelity Canada Fund | Fidelity China vs. Fidelity Pacific Basin |
| Fidelity Leveraged vs. Fidelity Canada Fund | Fidelity Leveraged vs. Fidelity International Discovery | Fidelity Leveraged vs. Fidelity Value Fund | Fidelity Leveraged vs. Fidelity Emerging Markets |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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