Correlation Between Fidelity Salem and Fidelity International
Can any of the company-specific risk be diversified away by investing in both Fidelity Salem and Fidelity International 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 Salem and Fidelity International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Salem Street and Fidelity International Real, you can compare the effects of market volatilities on Fidelity Salem and Fidelity International 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 Salem with a short position of Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Salem and Fidelity International.
Diversification Opportunities for Fidelity Salem and Fidelity International
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Salem Street and Fidelity International Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and Fidelity Salem 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 Salem Street are associated (or correlated) with Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of Fidelity Salem i.e., Fidelity Salem and Fidelity International go up and down completely randomly.
Pair Corralation between Fidelity Salem and Fidelity International
Assuming the 90 days horizon Fidelity Salem Street is expected to generate 1.05 times more return on investment than Fidelity International. However, Fidelity Salem is 1.05 times more volatile than Fidelity International Real. It trades about 0.25 of its potential returns per unit of risk. Fidelity International Real is currently generating about -0.17 per unit of risk. If you would invest 1,262 in Fidelity Salem Street on September 13, 2024 and sell it today you would earn a total of 43.00 from holding Fidelity Salem Street or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Salem Street vs. Fidelity International Real
Performance |
| Timeline |
| Fidelity Salem Street |
| Fidelity International |
Fidelity Salem and Fidelity International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Salem and Fidelity International
The main advantage of trading using opposite Fidelity Salem and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Salem position performs unexpectedly, Fidelity International 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 International will offset losses from the drop in Fidelity International's long position.| Fidelity Salem vs. Fidelity Freedom 2015 | Fidelity Salem vs. Fidelity Puritan Fund | Fidelity Salem vs. Fidelity Puritan Fund | Fidelity Salem vs. Fidelity Pennsylvania Municipal |
| Fidelity International vs. Old Westbury Small | Fidelity International vs. Sp Smallcap 600 | Fidelity International vs. Df Dent Small | Fidelity International vs. Kinetics Small Cap |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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