Correlation Between Fidelity China and Seafarer Overseas
Can any of the company-specific risk be diversified away by investing in both Fidelity China and Seafarer Overseas 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 China and Seafarer Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity China Region and Seafarer Overseas Growth, you can compare the effects of market volatilities on Fidelity China and Seafarer Overseas 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 China with a short position of Seafarer Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity China and Seafarer Overseas.
Diversification Opportunities for Fidelity China and Seafarer Overseas
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fidelity and Seafarer is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity China Region and Seafarer Overseas Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seafarer Overseas Growth and Fidelity China 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 China Region are associated (or correlated) with Seafarer Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seafarer Overseas Growth has no effect on the direction of Fidelity China i.e., Fidelity China and Seafarer Overseas go up and down completely randomly.
Pair Corralation between Fidelity China and Seafarer Overseas
Assuming the 90 days horizon Fidelity China Region is expected to generate 1.81 times more return on investment than Seafarer Overseas. However, Fidelity China is 1.81 times more volatile than Seafarer Overseas Growth. It trades about 0.04 of its potential returns per unit of risk. Seafarer Overseas Growth is currently generating about 0.02 per unit of risk. If you would invest 3,256 in Fidelity China Region on August 31, 2024 and sell it today you would earn a total of 613.00 from holding Fidelity China Region or generate 18.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity China Region vs. Seafarer Overseas Growth
Performance |
| Timeline |
| Fidelity China Region |
| Seafarer Overseas Growth |
Fidelity China and Seafarer Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity China and Seafarer Overseas
The main advantage of trading using opposite Fidelity China and Seafarer Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity China position performs unexpectedly, Seafarer Overseas 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 Seafarer Overseas will offset losses from the drop in Seafarer Overseas' long position.| Fidelity China vs. Nationwide Growth Fund | Fidelity China vs. T Rowe Price | Fidelity China vs. Legg Mason Partners | Fidelity China vs. Rational Defensive Growth |
| Seafarer Overseas vs. Short Precious Metals | Seafarer Overseas vs. Global Gold Fund | Seafarer Overseas vs. Precious Metals And | Seafarer Overseas vs. Great West Goldman Sachs |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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