Correlation Between Fidelity International and Fidelity Intermediate
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Fidelity Intermediate 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 Intermediate 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 Intermediate Treasury, you can compare the effects of market volatilities on Fidelity International and Fidelity Intermediate 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 Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Fidelity Intermediate.
Diversification Opportunities for Fidelity International and Fidelity Intermediate
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Index and Fidelity Intermediate Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Intermediate 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 Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Intermediate has no effect on the direction of Fidelity International i.e., Fidelity International and Fidelity Intermediate go up and down completely randomly.
Pair Corralation between Fidelity International and Fidelity Intermediate
Assuming the 90 days horizon Fidelity International Index is expected to under-perform the Fidelity Intermediate. In addition to that, Fidelity International is 2.03 times more volatile than Fidelity Intermediate Treasury. It trades about -0.13 of its total potential returns per unit of risk. Fidelity Intermediate Treasury is currently generating about 0.06 per unit of volatility. If you would invest 963.00 in Fidelity Intermediate Treasury on August 31, 2024 and sell it today you would earn a total of 5.00 from holding Fidelity Intermediate Treasury or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International Index vs. Fidelity Intermediate Treasury
Performance |
| Timeline |
| Fidelity International |
| Fidelity Intermediate |
Fidelity International and Fidelity Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Fidelity Intermediate
The main advantage of trading using opposite Fidelity International and Fidelity Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Fidelity Intermediate 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 Intermediate will offset losses from the drop in Fidelity Intermediate'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 |
| Fidelity Intermediate vs. Vanguard Gnma Fund | Fidelity Intermediate vs. Us Government Securities | Fidelity Intermediate vs. American Funds Government | Fidelity Intermediate vs. Fidelity Sai Treasury |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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