Correlation Between Fidelity Metaverse and IShares Blockchain
Can any of the company-specific risk be diversified away by investing in both Fidelity Metaverse and IShares Blockchain 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 Metaverse and IShares Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Metaverse ETF and iShares Blockchain and, you can compare the effects of market volatilities on Fidelity Metaverse and IShares Blockchain 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 Metaverse with a short position of IShares Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Metaverse and IShares Blockchain.
Diversification Opportunities for Fidelity Metaverse and IShares Blockchain
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and IShares is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Metaverse ETF and iShares Blockchain and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Blockchain and and Fidelity Metaverse 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 Metaverse ETF are associated (or correlated) with IShares Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Blockchain and has no effect on the direction of Fidelity Metaverse i.e., Fidelity Metaverse and IShares Blockchain go up and down completely randomly.
Pair Corralation between Fidelity Metaverse and IShares Blockchain
Given the investment horizon of 90 days Fidelity Metaverse is expected to generate 8.96 times less return on investment than IShares Blockchain. But when comparing it to its historical volatility, Fidelity Metaverse ETF is 5.19 times less risky than IShares Blockchain. It trades about 0.16 of its potential returns per unit of risk. iShares Blockchain and is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,157 in iShares Blockchain and on September 1, 2024 and sell it today you would earn a total of 1,186 from holding iShares Blockchain and or generate 37.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Metaverse ETF vs. iShares Blockchain and
Performance |
| Timeline |
| Fidelity Metaverse ETF |
| iShares Blockchain and |
Fidelity Metaverse and IShares Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Metaverse and IShares Blockchain
The main advantage of trading using opposite Fidelity Metaverse and IShares Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Metaverse position performs unexpectedly, IShares Blockchain 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 IShares Blockchain will offset losses from the drop in IShares Blockchain's long position.| Fidelity Metaverse vs. Fidelity Crypto Industry | Fidelity Metaverse vs. Fidelity Covington Trust | Fidelity Metaverse vs. ProShares Metaverse ETF | Fidelity Metaverse vs. Fidelity Covington Trust |
| IShares Blockchain vs. Fidelity Crypto Industry | IShares Blockchain vs. iShares Emergent Food | IShares Blockchain vs. Valkyrie Bitcoin Miners | IShares Blockchain vs. VanEck Digital Transformation |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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