Correlation Between Fidelity New and Global X
Can any of the company-specific risk be diversified away by investing in both Fidelity New and Global X 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 New and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity New Millennium and Global X Thematic, you can compare the effects of market volatilities on Fidelity New and Global X 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 New with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Global X.
Diversification Opportunities for Fidelity New and Global X
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Global is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Millennium and Global X Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Thematic and Fidelity New 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 New Millennium are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Thematic has no effect on the direction of Fidelity New i.e., Fidelity New and Global X go up and down completely randomly.
Pair Corralation between Fidelity New and Global X
Given the investment horizon of 90 days Fidelity New Millennium is expected to generate 0.58 times more return on investment than Global X. However, Fidelity New Millennium is 1.73 times less risky than Global X. It trades about 0.09 of its potential returns per unit of risk. Global X Thematic is currently generating about 0.01 per unit of risk. If you would invest 2,959 in Fidelity New Millennium on September 3, 2024 and sell it today you would earn a total of 1,125 from holding Fidelity New Millennium or generate 38.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 83.43% |
| Values | Daily Returns |
Fidelity New Millennium vs. Global X Thematic
Performance |
| Timeline |
| Fidelity New Millennium |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Global X Thematic |
Fidelity New and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity New and Global X
The main advantage of trading using opposite Fidelity New and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity New position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Fidelity New vs. Fidelity Blue Chip | Fidelity New vs. Fidelity Blue Chip | Fidelity New vs. Fidelity Covington Trust |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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