Correlation Between IShares Core and Fidelity Value
Can any of the company-specific risk be diversified away by investing in both IShares Core and Fidelity Value 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 Value 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 Value Factor, you can compare the effects of market volatilities on IShares Core and Fidelity Value 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 Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Fidelity Value.
Diversification Opportunities for IShares Core and Fidelity Value
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IShares and Fidelity is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Fidelity Value Factor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Value Factor 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 Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Value Factor has no effect on the direction of IShares Core i.e., IShares Core and Fidelity Value go up and down completely randomly.
Pair Corralation between IShares Core and Fidelity Value
Given the investment horizon of 90 days iShares Core MSCI is expected to under-perform the Fidelity Value. But the etf apears to be less risky and, when comparing its historical volatility, iShares Core MSCI is 1.22 times less risky than Fidelity Value. The etf trades about -0.09 of its potential returns per unit of risk. The Fidelity Value Factor is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 5,972 in Fidelity Value Factor on January 13, 2025 and sell it today you would lose (321.00) from holding Fidelity Value Factor or give up 5.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. Fidelity Value Factor
Performance |
| Timeline |
| iShares Core MSCI |
| Fidelity Value Factor |
IShares Core and Fidelity Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Fidelity Value
The main advantage of trading using opposite IShares Core and Fidelity Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Fidelity Value 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 Value will offset losses from the drop in Fidelity Value's long position.| IShares Core vs. Dimensional ETF Trust | IShares Core vs. Dimensional ETF Trust | IShares Core vs. Dimensional International Core | IShares Core vs. Dimensional International Value |
| Fidelity Value vs. Fidelity Quality Factor | Fidelity Value vs. Fidelity Momentum Factor | Fidelity Value vs. Fidelity Low Volatility | Fidelity Value vs. Fidelity Dividend ETF |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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