Correlation Between Global X and Fidelity Dividend
Can any of the company-specific risk be diversified away by investing in both Global X and Fidelity Dividend 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 Global X and Fidelity Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Seasonal and Fidelity Dividend for, you can compare the effects of market volatilities on Global X and Fidelity Dividend 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 Global X with a short position of Fidelity Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Fidelity Dividend.
Diversification Opportunities for Global X and Fidelity Dividend
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Fidelity is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Global X Seasonal and Fidelity Dividend for in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Dividend for and Global X 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 Global X Seasonal are associated (or correlated) with Fidelity Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Dividend for has no effect on the direction of Global X i.e., Global X and Fidelity Dividend go up and down completely randomly.
Pair Corralation between Global X and Fidelity Dividend
Assuming the 90 days trading horizon Global X is expected to generate 1.47 times less return on investment than Fidelity Dividend. But when comparing it to its historical volatility, Global X Seasonal is 1.22 times less risky than Fidelity Dividend. It trades about 0.1 of its potential returns per unit of risk. Fidelity Dividend for is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,112 in Fidelity Dividend for on August 26, 2024 and sell it today you would earn a total of 1,342 from holding Fidelity Dividend for or generate 43.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.98% |
| Values | Daily Returns |
Global X Seasonal vs. Fidelity Dividend for
Performance |
| Timeline |
| Global X Seasonal |
| Fidelity Dividend for |
Global X and Fidelity Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Fidelity Dividend
The main advantage of trading using opposite Global X and Fidelity Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Fidelity Dividend 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 Dividend will offset losses from the drop in Fidelity Dividend's long position.| Global X vs. Global X Active | Global X vs. Global X Active | Global X vs. Global X Active | Global X vs. Global X Active |
| Fidelity Dividend vs. BMO Europe High | Fidelity Dividend vs. BMO Covered Call | Fidelity Dividend vs. BMO Covered Call | Fidelity Dividend vs. BMO Europe High |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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