Correlation Between Fidelity Stock and Fidelity International
Can any of the company-specific risk be diversified away by investing in both Fidelity Stock 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 Stock 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 Stock Selector and Fidelity International Small, you can compare the effects of market volatilities on Fidelity Stock 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 Stock with a short position of Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Stock and Fidelity International.
Diversification Opportunities for Fidelity Stock and Fidelity International
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Stock Selector and Fidelity International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and Fidelity Stock 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 Stock Selector 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 Stock i.e., Fidelity Stock and Fidelity International go up and down completely randomly.
Pair Corralation between Fidelity Stock and Fidelity International
Assuming the 90 days horizon Fidelity Stock Selector is expected to under-perform the Fidelity International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Stock Selector is 1.2 times less risky than Fidelity International. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Fidelity International Small is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,997 in Fidelity International Small on November 27, 2024 and sell it today you would earn a total of 61.00 from holding Fidelity International Small or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Stock Selector vs. Fidelity International Small
Performance |
| Timeline |
| Fidelity Stock Selector |
| Fidelity International |
Fidelity Stock and Fidelity International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Stock and Fidelity International
The main advantage of trading using opposite Fidelity Stock and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Stock 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 Stock vs. Fidelity Mid Cap | Fidelity Stock vs. Fidelity Blue Chip | Fidelity Stock vs. Fidelity Value Discovery | Fidelity Stock vs. Fidelity Stock Selector |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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