Correlation Between Fidelity Emerging and Lifex Inflation
Can any of the company-specific risk be diversified away by investing in both Fidelity Emerging and Lifex Inflation 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 Lifex Inflation 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 Lifex Inflation Protected Income, you can compare the effects of market volatilities on Fidelity Emerging and Lifex Inflation 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 Lifex Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Emerging and Lifex Inflation.
Diversification Opportunities for Fidelity Emerging and Lifex Inflation
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Lifex is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Emerging Asia and Lifex Inflation Protected Inco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Inflation Prot 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 Lifex Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Inflation Prot has no effect on the direction of Fidelity Emerging i.e., Fidelity Emerging and Lifex Inflation go up and down completely randomly.
Pair Corralation between Fidelity Emerging and Lifex Inflation
Assuming the 90 days horizon Fidelity Emerging Asia is expected to generate 2.47 times more return on investment than Lifex Inflation. However, Fidelity Emerging is 2.47 times more volatile than Lifex Inflation Protected Income. It trades about 0.1 of its potential returns per unit of risk. Lifex Inflation Protected Income is currently generating about 0.06 per unit of risk. If you would invest 3,937 in Fidelity Emerging Asia on September 14, 2024 and sell it today you would earn a total of 1,187 from holding Fidelity Emerging Asia or generate 30.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 88.31% |
| Values | Daily Returns |
Fidelity Emerging Asia vs. Lifex Inflation Protected Inco
Performance |
| Timeline |
| Fidelity Emerging Asia |
| Lifex Inflation Prot |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fidelity Emerging and Lifex Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Emerging and Lifex Inflation
The main advantage of trading using opposite Fidelity Emerging and Lifex Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Emerging position performs unexpectedly, Lifex Inflation 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 Lifex Inflation will offset losses from the drop in Lifex Inflation'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 |
| Lifex Inflation vs. Stone Ridge High | Lifex Inflation vs. Fidelity Emerging Asia | Lifex Inflation vs. 1290 High Yield | Lifex Inflation vs. Putnam Short Duration |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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