Correlation Between Fidelity International and Fidelity Global
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Fidelity Global 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 Fidelity Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity International Enhanced and Fidelity Global Equity, you can compare the effects of market volatilities on Fidelity International and Fidelity Global 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 Fidelity Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Fidelity Global.
Diversification Opportunities for Fidelity International and Fidelity Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fidelity and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Enhance and Fidelity Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Equity 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 Enhanced are associated (or correlated) with Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Equity has no effect on the direction of Fidelity International i.e., Fidelity International and Fidelity Global go up and down completely randomly.
Pair Corralation between Fidelity International and Fidelity Global
Assuming the 90 days horizon Fidelity International Enhanced is expected to generate 1.31 times more return on investment than Fidelity Global. However, Fidelity International is 1.31 times more volatile than Fidelity Global Equity. It trades about 0.06 of its potential returns per unit of risk. Fidelity Global Equity is currently generating about 0.08 per unit of risk. If you would invest 1,011 in Fidelity International Enhanced on November 5, 2024 and sell it today you would earn a total of 56.00 from holding Fidelity International Enhanced or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 22.47% |
| Values | Daily Returns |
Fidelity International Enhance vs. Fidelity Global Equity
Performance |
| Timeline |
| Fidelity International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fidelity Global Equity |
Fidelity International and Fidelity Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Fidelity Global
The main advantage of trading using opposite Fidelity International and Fidelity Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Fidelity Global 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 Global will offset losses from the drop in Fidelity Global's long position.| Fidelity International vs. Fidelity International Value | Fidelity International vs. Fidelity Total International |
| Fidelity Global vs. Fidelity Emerging Markets | Fidelity Global vs. Fidelity Total International | Fidelity Global vs. Fidelity International Value |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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