Correlation Between Fidelity MSCI and SPDR FactSet
Can any of the company-specific risk be diversified away by investing in both Fidelity MSCI and SPDR FactSet 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 FactSet 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 FactSet Innovative, you can compare the effects of market volatilities on Fidelity MSCI and SPDR FactSet 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 FactSet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity MSCI and SPDR FactSet.
Diversification Opportunities for Fidelity MSCI and SPDR FactSet
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and SPDR is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity MSCI Information and SPDR FactSet Innovative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR FactSet Innovative 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 FactSet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR FactSet Innovative has no effect on the direction of Fidelity MSCI i.e., Fidelity MSCI and SPDR FactSet go up and down completely randomly.
Pair Corralation between Fidelity MSCI and SPDR FactSet
Given the investment horizon of 90 days Fidelity MSCI Information is expected to generate 0.78 times more return on investment than SPDR FactSet. However, Fidelity MSCI Information is 1.28 times less risky than SPDR FactSet. It trades about 0.1 of its potential returns per unit of risk. SPDR FactSet Innovative is currently generating about 0.08 per unit of risk. If you would invest 9,922 in Fidelity MSCI Information on August 26, 2024 and sell it today you would earn a total of 8,568 from holding Fidelity MSCI Information or generate 86.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity MSCI Information vs. SPDR FactSet Innovative
Performance |
| Timeline |
| Fidelity MSCI Information |
| SPDR FactSet Innovative |
Fidelity MSCI and SPDR FactSet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity MSCI and SPDR FactSet
The main advantage of trading using opposite Fidelity MSCI and SPDR FactSet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity MSCI position performs unexpectedly, SPDR FactSet 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 FactSet will offset losses from the drop in SPDR FactSet'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 FactSet vs. SPDR SP Software | SPDR FactSet vs. SPDR Morgan Stanley | SPDR FactSet vs. SPDR SP Health |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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