Correlation Between Fidelity International and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Fidelity Series 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 Fidelity Series 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 Fidelity Series Emerging, you can compare the effects of market volatilities on Fidelity International and Fidelity Series 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 Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Fidelity Series.
Diversification Opportunities for Fidelity International and Fidelity Series
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Index and Fidelity Series Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Emerging 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 Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Emerging has no effect on the direction of Fidelity International i.e., Fidelity International and Fidelity Series go up and down completely randomly.
Pair Corralation between Fidelity International and Fidelity Series
Assuming the 90 days horizon Fidelity International Index is expected to generate 0.99 times more return on investment than Fidelity Series. However, Fidelity International Index is 1.01 times less risky than Fidelity Series. It trades about 0.08 of its potential returns per unit of risk. Fidelity Series Emerging is currently generating about -0.04 per unit of risk. If you would invest 4,835 in Fidelity International Index on October 26, 2024 and sell it today you would earn a total of 114.00 from holding Fidelity International Index or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International Index vs. Fidelity Series Emerging
Performance |
| Timeline |
| Fidelity International |
| Fidelity Series Emerging |
Fidelity International and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Fidelity Series
The main advantage of trading using opposite Fidelity International and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Fidelity Series 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 Series will offset losses from the drop in Fidelity Series' 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 |
| Fidelity Series vs. Fidelity New Markets | Fidelity Series vs. Fidelity Advisor Sustainable | Fidelity Series vs. Fidelity New Markets | Fidelity Series vs. Fidelity Advisor Sustainable |
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 CEOs Directory module to screen CEOs from public companies around the world.
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