Correlation Between Fidelity International and Cambiar International
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Cambiar 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 International and Cambiar International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity International Index and Cambiar International Equity, you can compare the effects of market volatilities on Fidelity International and Cambiar 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 International with a short position of Cambiar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Cambiar International.
Diversification Opportunities for Fidelity International and Cambiar International
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Cambiar is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Index and Cambiar International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar International and Fidelity International 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 International Index are associated (or correlated) with Cambiar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar International has no effect on the direction of Fidelity International i.e., Fidelity International and Cambiar International go up and down completely randomly.
Pair Corralation between Fidelity International and Cambiar International
Assuming the 90 days horizon Fidelity International Index is expected to generate 1.08 times more return on investment than Cambiar International. However, Fidelity International is 1.08 times more volatile than Cambiar International Equity. It trades about 0.06 of its potential returns per unit of risk. Cambiar International Equity is currently generating about 0.05 per unit of risk. If you would invest 4,039 in Fidelity International Index on August 30, 2024 and sell it today you would earn a total of 937.00 from holding Fidelity International Index or generate 23.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International Index vs. Cambiar International Equity
Performance |
| Timeline |
| Fidelity International |
| Cambiar International |
Fidelity International and Cambiar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Cambiar International
The main advantage of trading using opposite Fidelity International and Cambiar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Cambiar 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 Cambiar International will offset losses from the drop in Cambiar International's long position.| Fidelity International vs. Fidelity Emerging Markets | Fidelity International vs. Fidelity Small Cap | Fidelity International vs. Fidelity Bond Index | Fidelity International vs. Fidelity Mid Cap |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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