Correlation Between Fidelity New and IShares
Can any of the company-specific risk be diversified away by investing in both Fidelity New and IShares 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 IShares 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 IShares, you can compare the effects of market volatilities on Fidelity New and IShares 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 IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and IShares.
Diversification Opportunities for Fidelity New and IShares
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidelity and IShares is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Millennium and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares 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 IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of Fidelity New i.e., Fidelity New and IShares go up and down completely randomly.
Pair Corralation between Fidelity New and IShares
Given the investment horizon of 90 days Fidelity New Millennium is expected to under-perform the IShares. But the etf apears to be less risky and, when comparing its historical volatility, Fidelity New Millennium is 121.6 times less risky than IShares. The etf trades about -0.02 of its potential returns per unit of risk. The IShares is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,543 in IShares on September 3, 2024 and sell it today you would earn a total of 25,816 from holding IShares or generate 1673.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.33% |
| Values | Daily Returns |
Fidelity New Millennium vs. IShares
Performance |
| Timeline |
| Fidelity New Millennium |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fidelity New and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity New and IShares
The main advantage of trading using opposite Fidelity New and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity New position performs unexpectedly, IShares 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 will offset losses from the drop in IShares' long position.| Fidelity New vs. Fidelity Blue Chip | Fidelity New vs. Fidelity Blue Chip | Fidelity New vs. Fidelity Covington Trust |
| IShares vs. AXIS Capital Holdings | IShares vs. Renaissancere Holdings | IShares vs. Aspira Womens Health | IShares vs. Prenetics Global |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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