Correlation Between Fidelity Emerging and Fidelity Canada
Can any of the company-specific risk be diversified away by investing in both Fidelity Emerging and Fidelity Canada 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 Emerging and Fidelity Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Emerging Asia and Fidelity Canada Fund, you can compare the effects of market volatilities on Fidelity Emerging and Fidelity Canada 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 Emerging with a short position of Fidelity Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Emerging and Fidelity Canada.
Diversification Opportunities for Fidelity Emerging and Fidelity Canada
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Emerging Asia and Fidelity Canada Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canada and Fidelity Emerging 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 Emerging Asia are associated (or correlated) with Fidelity Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canada has no effect on the direction of Fidelity Emerging i.e., Fidelity Emerging and Fidelity Canada go up and down completely randomly.
Pair Corralation between Fidelity Emerging and Fidelity Canada
Assuming the 90 days horizon Fidelity Emerging Asia is expected to generate 1.3 times more return on investment than Fidelity Canada. However, Fidelity Emerging is 1.3 times more volatile than Fidelity Canada Fund. It trades about 0.06 of its potential returns per unit of risk. Fidelity Canada Fund is currently generating about 0.07 per unit of risk. If you would invest 3,777 in Fidelity Emerging Asia on August 28, 2024 and sell it today you would earn a total of 1,139 from holding Fidelity Emerging Asia or generate 30.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Emerging Asia vs. Fidelity Canada Fund
Performance |
| Timeline |
| Fidelity Emerging Asia |
| Fidelity Canada |
Fidelity Emerging and Fidelity Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Emerging and Fidelity Canada
The main advantage of trading using opposite Fidelity Emerging and Fidelity Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Emerging position performs unexpectedly, Fidelity Canada 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 Canada will offset losses from the drop in Fidelity Canada's long position.| Fidelity Emerging vs. Fidelity China Region | Fidelity Emerging vs. Fidelity Emerging Markets | Fidelity Emerging vs. Fidelity Canada Fund | Fidelity Emerging vs. Fidelity Pacific Basin |
| Fidelity Canada vs. Fidelity Emerging Asia | Fidelity Canada vs. Fidelity Emerging Markets | Fidelity Canada vs. Fidelity China Region | Fidelity Canada vs. Fidelity Leveraged Pany |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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