Correlation Between Fidelity International and Johcm International
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Johcm 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 Johcm 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 Johcm International Opportunities, you can compare the effects of market volatilities on Fidelity International and Johcm 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 Johcm International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Johcm International.
Diversification Opportunities for Fidelity International and Johcm International
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and JOHCM is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Index and Johcm International Opportunit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm 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 Johcm International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm International has no effect on the direction of Fidelity International i.e., Fidelity International and Johcm International go up and down completely randomly.
Pair Corralation between Fidelity International and Johcm International
Assuming the 90 days horizon Fidelity International Index is expected to generate 1.23 times more return on investment than Johcm International. However, Fidelity International is 1.23 times more volatile than Johcm International Opportunities. It trades about -0.17 of its potential returns per unit of risk. Johcm International Opportunities is currently generating about -0.21 per unit of risk. If you would invest 5,133 in Fidelity International Index on August 29, 2024 and sell it today you would lose (157.00) from holding Fidelity International Index or give up 3.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International Index vs. Johcm International Opportunit
Performance |
| Timeline |
| Fidelity International |
| Johcm International |
Fidelity International and Johcm International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Johcm International
The main advantage of trading using opposite Fidelity International and Johcm International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Johcm 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 Johcm International will offset losses from the drop in Johcm 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 |
| Johcm International vs. Victory High Yield | Johcm International vs. Artisan High Income | Johcm International vs. Ms Global Fixed | Johcm International vs. Rbc Ultra Short Fixed |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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