Correlation Between Fidelity Emerging and Sextant Short
Can any of the company-specific risk be diversified away by investing in both Fidelity Emerging and Sextant Short 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 Sextant Short 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 Sextant Short Term Bond, you can compare the effects of market volatilities on Fidelity Emerging and Sextant Short 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 Sextant Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Emerging and Sextant Short.
Diversification Opportunities for Fidelity Emerging and Sextant Short
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Sextant is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Emerging Asia and Sextant Short Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant Short Term 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 Sextant Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant Short Term has no effect on the direction of Fidelity Emerging i.e., Fidelity Emerging and Sextant Short go up and down completely randomly.
Pair Corralation between Fidelity Emerging and Sextant Short
Assuming the 90 days horizon Fidelity Emerging Asia is expected to generate 6.89 times more return on investment than Sextant Short. However, Fidelity Emerging is 6.89 times more volatile than Sextant Short Term Bond. It trades about 0.13 of its potential returns per unit of risk. Sextant Short Term Bond is currently generating about 0.08 per unit of risk. If you would invest 5,013 in Fidelity Emerging Asia on September 14, 2024 and sell it today you would earn a total of 111.00 from holding Fidelity Emerging Asia or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Emerging Asia vs. Sextant Short Term Bond
Performance |
| Timeline |
| Fidelity Emerging Asia |
| Sextant Short Term |
Fidelity Emerging and Sextant Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Emerging and Sextant Short
The main advantage of trading using opposite Fidelity Emerging and Sextant Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Emerging position performs unexpectedly, Sextant Short 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 Sextant Short will offset losses from the drop in Sextant Short'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 |
| Sextant Short vs. Sextant Growth Fund | Sextant Short vs. Sextant International Fund | Sextant Short vs. Sextant Bond Income | Sextant Short vs. Sextant E 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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