Correlation Between Fidelity International and Global X
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Global X 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 International and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity International High and Global X MSCI, you can compare the effects of market volatilities on Fidelity International and Global X 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 International with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Global X.
Diversification Opportunities for Fidelity International and Global X
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Global is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International High and Global X MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MSCI and Fidelity International 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 International High are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X MSCI has no effect on the direction of Fidelity International i.e., Fidelity International and Global X go up and down completely randomly.
Pair Corralation between Fidelity International and Global X
Given the investment horizon of 90 days Fidelity International is expected to generate 1.36 times less return on investment than Global X. But when comparing it to its historical volatility, Fidelity International High is 1.04 times less risky than Global X. It trades about 0.04 of its potential returns per unit of risk. Global X MSCI is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,291 in Global X MSCI on August 27, 2024 and sell it today you would earn a total of 143.00 from holding Global X MSCI or generate 11.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International High vs. Global X MSCI
Performance |
| Timeline |
| Fidelity International |
| Global X MSCI |
Fidelity International and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Global X
The main advantage of trading using opposite Fidelity International and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.The idea behind Fidelity International High and Global X MSCI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Global X vs. Global X MSCI | Global X vs. Global X Alternative | Global X vs. First Trust Intl | Global X vs. iShares AsiaPacific Dividend |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |