Correlation Between Fidelity 500 and Sprucegrove International
Can any of the company-specific risk be diversified away by investing in both Fidelity 500 and Sprucegrove 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 500 and Sprucegrove International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity 500 Index and Sprucegrove International Equity, you can compare the effects of market volatilities on Fidelity 500 and Sprucegrove 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 500 with a short position of Sprucegrove International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity 500 and Sprucegrove International.
Diversification Opportunities for Fidelity 500 and Sprucegrove International
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Sprucegrove is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity 500 Index and Sprucegrove International Equi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprucegrove International and Fidelity 500 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 500 Index are associated (or correlated) with Sprucegrove International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprucegrove International has no effect on the direction of Fidelity 500 i.e., Fidelity 500 and Sprucegrove International go up and down completely randomly.
Pair Corralation between Fidelity 500 and Sprucegrove International
Assuming the 90 days horizon Fidelity 500 Index is expected to generate 0.92 times more return on investment than Sprucegrove International. However, Fidelity 500 Index is 1.08 times less risky than Sprucegrove International. It trades about -0.05 of its potential returns per unit of risk. Sprucegrove International Equity is currently generating about -0.42 per unit of risk. If you would invest 20,998 in Fidelity 500 Index on October 10, 2024 and sell it today you would lose (250.00) from holding Fidelity 500 Index or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity 500 Index vs. Sprucegrove International Equi
Performance |
| Timeline |
| Fidelity 500 Index |
| Sprucegrove International |
Fidelity 500 and Sprucegrove International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity 500 and Sprucegrove International
The main advantage of trading using opposite Fidelity 500 and Sprucegrove International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity 500 position performs unexpectedly, Sprucegrove 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 Sprucegrove International will offset losses from the drop in Sprucegrove International's long position.| Fidelity 500 vs. Fidelity Total Market | Fidelity 500 vs. Fidelity Extended Market | Fidelity 500 vs. Fidelity Zero Total | Fidelity 500 vs. Fidelity Small Cap |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |