Correlation Between Fidelity Nordic and Asia Pacific
Can any of the company-specific risk be diversified away by investing in both Fidelity Nordic and Asia Pacific 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 Nordic and Asia Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Nordic Fund and Asia Pacific Small, you can compare the effects of market volatilities on Fidelity Nordic and Asia Pacific 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 Nordic with a short position of Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Nordic and Asia Pacific.
Diversification Opportunities for Fidelity Nordic and Asia Pacific
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fidelity and Asia is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Nordic Fund and Asia Pacific Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Small and Fidelity Nordic 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 Nordic Fund are associated (or correlated) with Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Small has no effect on the direction of Fidelity Nordic i.e., Fidelity Nordic and Asia Pacific go up and down completely randomly.
Pair Corralation between Fidelity Nordic and Asia Pacific
Assuming the 90 days horizon Fidelity Nordic Fund is expected to under-perform the Asia Pacific. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Nordic Fund is 1.2 times less risky than Asia Pacific. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Asia Pacific Small is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,770 in Asia Pacific Small on September 2, 2024 and sell it today you would earn a total of 91.00 from holding Asia Pacific Small or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Nordic Fund vs. Asia Pacific Small
Performance |
| Timeline |
| Fidelity Nordic |
| Asia Pacific Small |
Fidelity Nordic and Asia Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Nordic and Asia Pacific
The main advantage of trading using opposite Fidelity Nordic and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Nordic position performs unexpectedly, Asia Pacific 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 Asia Pacific will offset losses from the drop in Asia Pacific's long position.| Fidelity Nordic vs. Fidelity Investment Trust | Fidelity Nordic vs. Fidelity Europe Fund | Fidelity Nordic vs. Fidelity Emerging Asia | Fidelity Nordic vs. Fidelity Pacific Basin |
| Asia Pacific vs. Dreyfus Natural Resources | Asia Pacific vs. Alpsalerian Energy Infrastructure | Asia Pacific vs. Hennessy Bp Energy | Asia Pacific vs. Ivy Energy Fund |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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