Correlation Between Fidelity International and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Europacific Growth 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 International and Europacific Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity International Growth and Europacific Growth Fund, you can compare the effects of market volatilities on Fidelity International and Europacific Growth 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 International with a short position of Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Europacific Growth.
Diversification Opportunities for Fidelity International and Europacific Growth
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Europacific is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Growth and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth and Fidelity International 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 International Growth are associated (or correlated) with Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Fidelity International i.e., Fidelity International and Europacific Growth go up and down completely randomly.
Pair Corralation between Fidelity International and Europacific Growth
Assuming the 90 days horizon Fidelity International Growth is expected to under-perform the Europacific Growth. In addition to that, Fidelity International is 1.01 times more volatile than Europacific Growth Fund. It trades about -0.03 of its total potential returns per unit of risk. Europacific Growth Fund is currently generating about 0.0 per unit of volatility. If you would invest 5,582 in Europacific Growth Fund on December 1, 2024 and sell it today you would earn a total of 0.00 from holding Europacific Growth Fund or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International Growth vs. Europacific Growth Fund
Performance |
| Timeline |
| Fidelity International |
| Europacific Growth |
Fidelity International and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Europacific Growth
The main advantage of trading using opposite Fidelity International and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Europacific Growth 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 Europacific Growth will offset losses from the drop in Europacific Growth's long position.The idea behind Fidelity International Growth and Europacific Growth Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Europacific Growth vs. Income Fund Of | Europacific Growth vs. American Funds 2015 | Europacific Growth vs. New World Fund | Europacific Growth vs. American Mutual 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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