Correlation Between Fidelity International and DWS
Can any of the company-specific risk be diversified away by investing in both Fidelity International and DWS 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 DWS 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 DWS, you can compare the effects of market volatilities on Fidelity International and DWS 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 DWS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and DWS.
Diversification Opportunities for Fidelity International and DWS
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidelity and DWS is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International High and DWS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DWS 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 DWS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DWS has no effect on the direction of Fidelity International i.e., Fidelity International and DWS go up and down completely randomly.
Pair Corralation between Fidelity International and DWS
Given the investment horizon of 90 days Fidelity International is expected to generate 1.41 times less return on investment than DWS. In addition to that, Fidelity International is 1.12 times more volatile than DWS. It trades about 0.05 of its total potential returns per unit of risk. DWS is currently generating about 0.08 per unit of volatility. If you would invest 2,044 in DWS on August 30, 2024 and sell it today you would earn a total of 492.00 from holding DWS or generate 24.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.85% |
| Values | Daily Returns |
Fidelity International High vs. DWS
Performance |
| Timeline |
| Fidelity International |
| DWS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fidelity International and DWS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and DWS
The main advantage of trading using opposite Fidelity International and DWS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, DWS 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 DWS will offset losses from the drop in DWS's long position.The idea behind Fidelity International High and DWS 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.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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