Correlation Between Fidelity China and Kopernik International
Can any of the company-specific risk be diversified away by investing in both Fidelity China and Kopernik International 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 Kopernik International 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 Kopernik International, you can compare the effects of market volatilities on Fidelity China and Kopernik International 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 Kopernik International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity China and Kopernik International.
Diversification Opportunities for Fidelity China and Kopernik International
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Kopernik is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity China Region and Kopernik International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopernik International 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 Kopernik International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopernik International has no effect on the direction of Fidelity China i.e., Fidelity China and Kopernik International go up and down completely randomly.
Pair Corralation between Fidelity China and Kopernik International
Assuming the 90 days horizon Fidelity China Region is expected to generate 1.76 times more return on investment than Kopernik International. However, Fidelity China is 1.76 times more volatile than Kopernik International. It trades about 0.04 of its potential returns per unit of risk. Kopernik International is currently generating about 0.0 per unit of risk. If you would invest 3,324 in Fidelity China Region on September 2, 2024 and sell it today you would earn a total of 584.00 from holding Fidelity China Region or generate 17.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity China Region vs. Kopernik International
Performance |
| Timeline |
| Fidelity China Region |
| Kopernik International |
Fidelity China and Kopernik International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity China and Kopernik International
The main advantage of trading using opposite Fidelity China and Kopernik International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity China position performs unexpectedly, Kopernik International 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 Kopernik International will offset losses from the drop in Kopernik International'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 |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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