Correlation Between Fidelity International and Sa International
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Sa International 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 Sa International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity International Small and Sa International Small, you can compare the effects of market volatilities on Fidelity International and Sa International 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 Sa International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Sa International.
Diversification Opportunities for Fidelity International and Sa International
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and SAISX is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Small and Sa International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa International 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 Small are associated (or correlated) with Sa International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa International Small has no effect on the direction of Fidelity International i.e., Fidelity International and Sa International go up and down completely randomly.
Pair Corralation between Fidelity International and Sa International
Assuming the 90 days horizon Fidelity International Small is expected to under-perform the Sa International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity International Small is 1.34 times less risky than Sa International. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Sa International Small is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,123 in Sa International Small on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Sa International Small or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International Small vs. Sa International Small
Performance |
| Timeline |
| Fidelity International |
| Sa International Small |
Fidelity International and Sa International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Sa International
The main advantage of trading using opposite Fidelity International and Sa International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Sa International 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 Sa International will offset losses from the drop in Sa International's long position.The idea behind Fidelity International Small and Sa International Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Sa International vs. Sa International Value | Sa International vs. Sa Value | Sa International vs. Sa Small Company | Sa International vs. Sa Mkt Fd |
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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