Correlation Between Fidelity International and Sit International
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Sit 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 International and Sit International 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 Sit International Growth, you can compare the effects of market volatilities on Fidelity International and Sit 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 International with a short position of Sit International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Sit International.
Diversification Opportunities for Fidelity International and Sit International
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Sit is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Growth and Sit International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit International 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 Sit International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit International Growth has no effect on the direction of Fidelity International i.e., Fidelity International and Sit International go up and down completely randomly.
Pair Corralation between Fidelity International and Sit International
Assuming the 90 days horizon Fidelity International Growth is expected to generate 1.07 times more return on investment than Sit International. However, Fidelity International is 1.07 times more volatile than Sit International Growth. It trades about 0.15 of its potential returns per unit of risk. Sit International Growth is currently generating about 0.06 per unit of risk. If you would invest 2,051 in Fidelity International Growth on September 4, 2024 and sell it today you would earn a total of 52.00 from holding Fidelity International Growth or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International Growth vs. Sit International Growth
Performance |
| Timeline |
| Fidelity International |
| Sit International Growth |
Fidelity International and Sit International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Sit International
The main advantage of trading using opposite Fidelity International and Sit International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Sit 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 Sit International will offset losses from the drop in Sit International's long position.The idea behind Fidelity International Growth and Sit International Growth 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.
| Sit International vs. Sit Small Cap | Sit International vs. Sit Global Dividend | Sit International vs. Sit Global Dividend | Sit International vs. Sit 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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