Correlation Between Global X and Fidelity Canadian
Can any of the company-specific risk be diversified away by investing in both Global X and Fidelity Canadian 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 Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X SPTSX and Fidelity Canadian Value, you can compare the effects of market volatilities on Global X and Fidelity Canadian 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 Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Fidelity Canadian.
Diversification Opportunities for Global X and Fidelity Canadian
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Global X SPTSX and Fidelity Canadian Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canadian Value 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 SPTSX are associated (or correlated) with Fidelity Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canadian Value has no effect on the direction of Global X i.e., Global X and Fidelity Canadian go up and down completely randomly.
Pair Corralation between Global X and Fidelity Canadian
Assuming the 90 days trading horizon Global X SPTSX is expected to generate 0.97 times more return on investment than Fidelity Canadian. However, Global X SPTSX is 1.03 times less risky than Fidelity Canadian. It trades about 0.19 of its potential returns per unit of risk. Fidelity Canadian Value is currently generating about 0.16 per unit of risk. If you would invest 5,700 in Global X SPTSX on August 29, 2024 and sell it today you would earn a total of 943.00 from holding Global X SPTSX or generate 16.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X SPTSX vs. Fidelity Canadian Value
Performance |
| Timeline |
| Global X SPTSX |
| Fidelity Canadian Value |
Global X and Fidelity Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Fidelity Canadian
The main advantage of trading using opposite Global X and Fidelity Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Fidelity Canadian 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 Canadian will offset losses from the drop in Fidelity Canadian's long position.| Global X vs. Global X SP | Global X vs. BMO SPTSX Capped | Global X vs. Vanguard FTSE Canada | Global X vs. iShares Core SPTSX |
| Fidelity Canadian vs. iShares SPTSX 60 | Fidelity Canadian vs. iShares Core SPTSX | Fidelity Canadian vs. BMO SPTSX Capped | Fidelity Canadian vs. Vanguard FTSE Canada |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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