Correlation Between Fidelity MSCI and SPDR Galaxy
Can any of the company-specific risk be diversified away by investing in both Fidelity MSCI and SPDR Galaxy 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 MSCI and SPDR Galaxy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity MSCI Information and SPDR Galaxy Transformative, you can compare the effects of market volatilities on Fidelity MSCI and SPDR Galaxy 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 MSCI with a short position of SPDR Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity MSCI and SPDR Galaxy.
Diversification Opportunities for Fidelity MSCI and SPDR Galaxy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and SPDR is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity MSCI Information and SPDR Galaxy Transformative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Galaxy Transfor and Fidelity MSCI 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 MSCI Information are associated (or correlated) with SPDR Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Galaxy Transfor has no effect on the direction of Fidelity MSCI i.e., Fidelity MSCI and SPDR Galaxy go up and down completely randomly.
Pair Corralation between Fidelity MSCI and SPDR Galaxy
Given the investment horizon of 90 days Fidelity MSCI Information is expected to generate 0.37 times more return on investment than SPDR Galaxy. However, Fidelity MSCI Information is 2.69 times less risky than SPDR Galaxy. It trades about 0.34 of its potential returns per unit of risk. SPDR Galaxy Transformative is currently generating about 0.1 per unit of risk. If you would invest 17,988 in Fidelity MSCI Information on September 18, 2024 and sell it today you would earn a total of 1,166 from holding Fidelity MSCI Information or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity MSCI Information vs. SPDR Galaxy Transformative
Performance |
| Timeline |
| Fidelity MSCI Information |
| SPDR Galaxy Transfor |
Fidelity MSCI and SPDR Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity MSCI and SPDR Galaxy
The main advantage of trading using opposite Fidelity MSCI and SPDR Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity MSCI position performs unexpectedly, SPDR Galaxy 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 SPDR Galaxy will offset losses from the drop in SPDR Galaxy's long position.| Fidelity MSCI vs. Fidelity MSCI Health | Fidelity MSCI vs. Fidelity MSCI Consumer | Fidelity MSCI vs. Fidelity MSCI Financials | Fidelity MSCI vs. Fidelity MSCI Energy |
| SPDR Galaxy vs. Invesco DWA Utilities | SPDR Galaxy vs. Invesco Dynamic Large | SPDR Galaxy vs. SCOR PK | SPDR Galaxy vs. Morningstar Unconstrained Allocation |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |