Correlation Between Fidelity Latin and Fidelity Emerging
Can any of the company-specific risk be diversified away by investing in both Fidelity Latin and Fidelity Emerging 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 Latin and Fidelity Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Latin America and Fidelity Emerging Markets, you can compare the effects of market volatilities on Fidelity Latin and Fidelity Emerging 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 Latin with a short position of Fidelity Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Latin and Fidelity Emerging.
Diversification Opportunities for Fidelity Latin and Fidelity Emerging
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and FIDELITY is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Latin America and Fidelity Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Emerging Markets and Fidelity Latin 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 Latin America are associated (or correlated) with Fidelity Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Emerging Markets has no effect on the direction of Fidelity Latin i.e., Fidelity Latin and Fidelity Emerging go up and down completely randomly.
Pair Corralation between Fidelity Latin and Fidelity Emerging
Assuming the 90 days horizon Fidelity Latin America is expected to generate about the same return on investment as Fidelity Emerging Markets. But, Fidelity Latin America is 1.85 times less risky than Fidelity Emerging. It trades about 0.05 of its potential returns per unit of risk. Fidelity Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 3,836 in Fidelity Emerging Markets on September 2, 2024 and sell it today you would earn a total of 54.00 from holding Fidelity Emerging Markets or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 40.63% |
| Values | Daily Returns |
Fidelity Latin America vs. Fidelity Emerging Markets
Performance |
| Timeline |
| Fidelity Latin America |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Fidelity Emerging Markets |
Fidelity Latin and Fidelity Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Latin and Fidelity Emerging
The main advantage of trading using opposite Fidelity Latin and Fidelity Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Latin position performs unexpectedly, Fidelity Emerging 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 Fidelity Emerging will offset losses from the drop in Fidelity Emerging's long position.| Fidelity Latin vs. Fidelity Emerging Asia | Fidelity Latin vs. Fidelity Canada Fund | Fidelity Latin vs. Fidelity Emerging Markets | Fidelity Latin vs. Fidelity China Region |
| Fidelity Emerging vs. Fidelity Emerging Asia | Fidelity Emerging vs. Fidelity Canada Fund | Fidelity Emerging vs. Fidelity China Region | Fidelity Emerging vs. Fidelity Pacific Basin |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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