Correlation Between IShares Core and Fidelity Emerging
Can any of the company-specific risk be diversified away by investing in both IShares Core and Fidelity Emerging 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 IShares Core and Fidelity Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core MSCI and Fidelity Emerging Markets, you can compare the effects of market volatilities on IShares Core and Fidelity Emerging 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 IShares Core with a short position of Fidelity Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Fidelity Emerging.
Diversification Opportunities for IShares Core and Fidelity Emerging
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Fidelity is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Fidelity Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Emerging Markets and IShares Core 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 iShares Core MSCI are associated (or correlated) with Fidelity Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Emerging Markets has no effect on the direction of IShares Core i.e., IShares Core and Fidelity Emerging go up and down completely randomly.
Pair Corralation between IShares Core and Fidelity Emerging
Given the investment horizon of 90 days iShares Core MSCI is expected to under-perform the Fidelity Emerging. In addition to that, IShares Core is 1.07 times more volatile than Fidelity Emerging Markets. It trades about -0.17 of its total potential returns per unit of risk. Fidelity Emerging Markets is currently generating about -0.13 per unit of volatility. If you would invest 2,639 in Fidelity Emerging Markets on August 25, 2024 and sell it today you would lose (71.00) from holding Fidelity Emerging Markets or give up 2.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. Fidelity Emerging Markets
Performance |
| Timeline |
| iShares Core MSCI |
| Fidelity Emerging Markets |
IShares Core and Fidelity Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Fidelity Emerging
The main advantage of trading using opposite IShares Core and Fidelity Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Fidelity Emerging 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 Emerging will offset losses from the drop in Fidelity Emerging's long position.| IShares Core vs. Freedom Day Dividend | IShares Core vs. Davis Select International | IShares Core vs. iShares MSCI China | IShares Core vs. SmartETFs Dividend Builder |
| Fidelity Emerging vs. Invesco PureBeta MSCI | Fidelity Emerging vs. Aquagold International | Fidelity Emerging vs. Morningstar Unconstrained Allocation | Fidelity Emerging vs. High Yield Municipal 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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