Correlation Between Fidelity Canada and Shelton Emerging
Can any of the company-specific risk be diversified away by investing in both Fidelity Canada and Shelton Emerging 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 Canada and Shelton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Canada Fund and Shelton Emerging Markets, you can compare the effects of market volatilities on Fidelity Canada and Shelton Emerging 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 Canada with a short position of Shelton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Canada and Shelton Emerging.
Diversification Opportunities for Fidelity Canada and Shelton Emerging
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and Shelton is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Canada Fund and Shelton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Emerging Markets and Fidelity Canada 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 Canada Fund are associated (or correlated) with Shelton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Emerging Markets has no effect on the direction of Fidelity Canada i.e., Fidelity Canada and Shelton Emerging go up and down completely randomly.
Pair Corralation between Fidelity Canada and Shelton Emerging
Assuming the 90 days horizon Fidelity Canada Fund is expected to generate 0.62 times more return on investment than Shelton Emerging. However, Fidelity Canada Fund is 1.61 times less risky than Shelton Emerging. It trades about 0.33 of its potential returns per unit of risk. Shelton Emerging Markets is currently generating about -0.26 per unit of risk. If you would invest 7,084 in Fidelity Canada Fund on September 4, 2024 and sell it today you would earn a total of 308.00 from holding Fidelity Canada Fund or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Canada Fund vs. Shelton Emerging Markets
Performance |
| Timeline |
| Fidelity Canada |
| Shelton Emerging Markets |
Fidelity Canada and Shelton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Canada and Shelton Emerging
The main advantage of trading using opposite Fidelity Canada and Shelton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Canada position performs unexpectedly, Shelton Emerging 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 Shelton Emerging will offset losses from the drop in Shelton Emerging's long position.| Fidelity Canada vs. Shelton Emerging Markets | Fidelity Canada vs. Transamerica Emerging Markets | Fidelity Canada vs. Fundvantage Trust | Fidelity Canada vs. Massmutual Select Diversified |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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