Correlation Between Fidelity International and Vela International
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Vela 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 Vela 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 Vela International, you can compare the effects of market volatilities on Fidelity International and Vela 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 Vela International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Vela International.
Diversification Opportunities for Fidelity International and Vela International
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Vela is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Index and Vela International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vela 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 Vela International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vela International has no effect on the direction of Fidelity International i.e., Fidelity International and Vela International go up and down completely randomly.
Pair Corralation between Fidelity International and Vela International
Assuming the 90 days horizon Fidelity International Index is expected to generate 1.12 times more return on investment than Vela International. However, Fidelity International is 1.12 times more volatile than Vela International. It trades about 0.06 of its potential returns per unit of risk. Vela International is currently generating about 0.06 per unit of risk. If you would invest 4,040 in Fidelity International Index on September 2, 2024 and sell it today you would earn a total of 995.00 from holding Fidelity International Index or generate 24.63% 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. Vela International
Performance |
| Timeline |
| Fidelity International |
| Vela International |
Fidelity International and Vela International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Vela International
The main advantage of trading using opposite Fidelity International and Vela International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Vela 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 Vela International will offset losses from the drop in Vela 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 |
| Vela International vs. Vela Large Cap | Vela International vs. Vela Small Cap | Vela International vs. Vela Small Cap | Vela International vs. Vela Income Opportunities |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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