Correlation Between Fidelity International and Great West
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Great West 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 Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity International Real and Great West Loomis Sayles, you can compare the effects of market volatilities on Fidelity International and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Great West.
Diversification Opportunities for Fidelity International and Great West
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and Great is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Real and Great West Loomis Sayles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Loomis 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 Real are associated (or correlated) with Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Loomis has no effect on the direction of Fidelity International i.e., Fidelity International and Great West go up and down completely randomly.
Pair Corralation between Fidelity International and Great West
Assuming the 90 days horizon Fidelity International Real is expected to under-perform the Great West. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity International Real is 1.64 times less risky than Great West. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Great West Loomis Sayles is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,801 in Great West Loomis Sayles on November 2, 2024 and sell it today you would earn a total of 140.00 from holding Great West Loomis Sayles or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International Real vs. Great West Loomis Sayles
Performance |
| Timeline |
| Fidelity International |
| Great West Loomis |
Fidelity International and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Great West
The main advantage of trading using opposite Fidelity International and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Fidelity International vs. Vy Baron Growth | Fidelity International vs. The Equity Growth | Fidelity International vs. Small Cap Growth | Fidelity International vs. Rational Defensive Growth |
| Great West vs. Ab All Market | Great West vs. Prudential Emerging Markets | Great West vs. Barings Emerging Markets | Great West vs. Dreyfus Bond Market |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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