Correlation Between Fidelity International and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Old Westbury 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 Old Westbury 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 Old Westbury Small, you can compare the effects of market volatilities on Fidelity International and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Old Westbury.
Diversification Opportunities for Fidelity International and Old Westbury
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Old is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Real and Old Westbury Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Small 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Small has no effect on the direction of Fidelity International i.e., Fidelity International and Old Westbury go up and down completely randomly.
Pair Corralation between Fidelity International and Old Westbury
Assuming the 90 days horizon Fidelity International Real is expected to under-perform the Old Westbury. In addition to that, Fidelity International is 1.1 times more volatile than Old Westbury Small. It trades about -0.17 of its total potential returns per unit of risk. Old Westbury Small is currently generating about 0.08 per unit of volatility. If you would invest 1,731 in Old Westbury Small on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Old Westbury Small or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International Real vs. Old Westbury Small
Performance |
| Timeline |
| Fidelity International |
| Old Westbury Small |
Fidelity International and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Old Westbury
The main advantage of trading using opposite Fidelity International and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Fidelity International vs. Old Westbury Small | Fidelity International vs. Sp Smallcap 600 | Fidelity International vs. Df Dent Small | Fidelity International vs. Kinetics Small Cap |
| Old Westbury vs. Old Westbury All | Old Westbury vs. Old Westbury California | Old Westbury vs. Old Westbury Credit | Old Westbury vs. Old Westbury Fixed |
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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