Correlation Between Fidelity Canada and Gmo High
Can any of the company-specific risk be diversified away by investing in both Fidelity Canada and Gmo High 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 Canada and Gmo High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Canada Fund and Gmo High Yield, you can compare the effects of market volatilities on Fidelity Canada and Gmo High 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 Canada with a short position of Gmo High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Canada and Gmo High.
Diversification Opportunities for Fidelity Canada and Gmo High
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Gmo is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Canada Fund and Gmo High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo High Yield and Fidelity Canada 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 Canada Fund are associated (or correlated) with Gmo High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo High Yield has no effect on the direction of Fidelity Canada i.e., Fidelity Canada and Gmo High go up and down completely randomly.
Pair Corralation between Fidelity Canada and Gmo High
Assuming the 90 days horizon Fidelity Canada Fund is expected to generate 2.92 times more return on investment than Gmo High. However, Fidelity Canada is 2.92 times more volatile than Gmo High Yield. It trades about 0.06 of its potential returns per unit of risk. Gmo High Yield is currently generating about 0.14 per unit of risk. If you would invest 6,184 in Fidelity Canada Fund on September 12, 2024 and sell it today you would earn a total of 1,197 from holding Fidelity Canada Fund or generate 19.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Canada Fund vs. Gmo High Yield
Performance |
| Timeline |
| Fidelity Canada |
| Gmo High Yield |
Fidelity Canada and Gmo High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Canada and Gmo High
The main advantage of trading using opposite Fidelity Canada and Gmo High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Canada position performs unexpectedly, Gmo High 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 Gmo High will offset losses from the drop in Gmo High's long position.| Fidelity Canada vs. Lord Abbett Affiliated | Fidelity Canada vs. Americafirst Large Cap | Fidelity Canada vs. Dodge Cox Stock | Fidelity Canada vs. Dunham Large Cap |
| Gmo High vs. Artisan High Income | Gmo High vs. Blackrock High Yield | Gmo High vs. Pax High Yield | Gmo High vs. Msift High Yield |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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