Correlation Between Aggressive Growth and Fidelity China
Can any of the company-specific risk be diversified away by investing in both Aggressive Growth and Fidelity China 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 Aggressive Growth and Fidelity China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aggressive Growth Allocation and Fidelity China Region, you can compare the effects of market volatilities on Aggressive Growth and Fidelity China 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 Aggressive Growth with a short position of Fidelity China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aggressive Growth and Fidelity China.
Diversification Opportunities for Aggressive Growth and Fidelity China
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aggressive and Fidelity is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Allocation and Fidelity China Region in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity China Region and Aggressive Growth 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 Aggressive Growth Allocation are associated (or correlated) with Fidelity China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity China Region has no effect on the direction of Aggressive Growth i.e., Aggressive Growth and Fidelity China go up and down completely randomly.
Pair Corralation between Aggressive Growth and Fidelity China
Assuming the 90 days horizon Aggressive Growth Allocation is expected to generate 0.51 times more return on investment than Fidelity China. However, Aggressive Growth Allocation is 1.94 times less risky than Fidelity China. It trades about 0.1 of its potential returns per unit of risk. Fidelity China Region is currently generating about 0.04 per unit of risk. If you would invest 829.00 in Aggressive Growth Allocation on November 28, 2024 and sell it today you would earn a total of 320.00 from holding Aggressive Growth Allocation or generate 38.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aggressive Growth Allocation vs. Fidelity China Region
Performance |
| Timeline |
| Aggressive Growth |
| Fidelity China Region |
Aggressive Growth and Fidelity China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aggressive Growth and Fidelity China
The main advantage of trading using opposite Aggressive Growth and Fidelity China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aggressive Growth position performs unexpectedly, Fidelity China 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 China will offset losses from the drop in Fidelity China's long position.| Aggressive Growth vs. Fznopx | Aggressive Growth vs. Fxybjx | Aggressive Growth vs. Rational Dividend Capture | Aggressive Growth vs. Fwnhtx |
| Fidelity China vs. Fidelity China Region | Fidelity China vs. Fidelity China Region | Fidelity China vs. Fidelity Advisor Emerging | Fidelity China vs. Fidelity Advisor International |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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