Correlation Between Fidelity Canada and Asia Pacific
Can any of the company-specific risk be diversified away by investing in both Fidelity Canada and Asia Pacific 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 Canada and Asia Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Canada Fund and Asia Pacific Small, you can compare the effects of market volatilities on Fidelity Canada and Asia Pacific 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 Canada with a short position of Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Canada and Asia Pacific.
Diversification Opportunities for Fidelity Canada and Asia Pacific
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Asia is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Canada Fund and Asia Pacific Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Small and Fidelity Canada 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 Canada Fund are associated (or correlated) with Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Small has no effect on the direction of Fidelity Canada i.e., Fidelity Canada and Asia Pacific go up and down completely randomly.
Pair Corralation between Fidelity Canada and Asia Pacific
Assuming the 90 days horizon Fidelity Canada Fund is expected to generate 0.61 times more return on investment than Asia Pacific. However, Fidelity Canada Fund is 1.65 times less risky than Asia Pacific. It trades about 0.16 of its potential returns per unit of risk. Asia Pacific Small is currently generating about 0.08 per unit of risk. If you would invest 7,016 in Fidelity Canada Fund on September 2, 2024 and sell it today you would earn a total of 473.00 from holding Fidelity Canada Fund or generate 6.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Canada Fund vs. Asia Pacific Small
Performance |
| Timeline |
| Fidelity Canada |
| Asia Pacific Small |
Fidelity Canada and Asia Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Canada and Asia Pacific
The main advantage of trading using opposite Fidelity Canada and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Canada position performs unexpectedly, Asia Pacific 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 Asia Pacific will offset losses from the drop in Asia Pacific's long position.| Fidelity Canada vs. Dimensional Retirement Income | Fidelity Canada vs. Franklin Lifesmart Retirement | Fidelity Canada vs. Calvert Moderate Allocation | Fidelity Canada vs. Transamerica Cleartrack Retirement |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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