Correlation Between Fidelity Worldwide and Fidelity Europe
Can any of the company-specific risk be diversified away by investing in both Fidelity Worldwide and Fidelity Europe 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 Worldwide and Fidelity Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Worldwide Fund and Fidelity Europe Fund, you can compare the effects of market volatilities on Fidelity Worldwide and Fidelity Europe 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 Worldwide with a short position of Fidelity Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Worldwide and Fidelity Europe.
Diversification Opportunities for Fidelity Worldwide and Fidelity Europe
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Fidelity is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Worldwide Fund and Fidelity Europe Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Europe and Fidelity Worldwide 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 Worldwide Fund are associated (or correlated) with Fidelity Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Europe has no effect on the direction of Fidelity Worldwide i.e., Fidelity Worldwide and Fidelity Europe go up and down completely randomly.
Pair Corralation between Fidelity Worldwide and Fidelity Europe
Assuming the 90 days horizon Fidelity Worldwide Fund is expected to generate 1.15 times more return on investment than Fidelity Europe. However, Fidelity Worldwide is 1.15 times more volatile than Fidelity Europe Fund. It trades about 0.09 of its potential returns per unit of risk. Fidelity Europe Fund is currently generating about -0.2 per unit of risk. If you would invest 3,993 in Fidelity Worldwide Fund on August 29, 2024 and sell it today you would earn a total of 73.00 from holding Fidelity Worldwide Fund or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Worldwide Fund vs. Fidelity Europe Fund
Performance |
| Timeline |
| Fidelity Worldwide |
| Fidelity Europe |
Fidelity Worldwide and Fidelity Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Worldwide and Fidelity Europe
The main advantage of trading using opposite Fidelity Worldwide and Fidelity Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Worldwide position performs unexpectedly, Fidelity Europe 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 Fidelity Europe will offset losses from the drop in Fidelity Europe's long position.| Fidelity Worldwide vs. Fidelity Pacific Basin | Fidelity Worldwide vs. Fidelity Europe Fund | Fidelity Worldwide vs. Fidelity International Capital | Fidelity Worldwide vs. Fidelity Overseas Fund |
| Fidelity Europe vs. Fidelity Pacific Basin | Fidelity Europe vs. Fidelity Japan Fund | Fidelity Europe vs. Fidelity Investment Trust | Fidelity Europe vs. Fidelity Nordic Fund |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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