Correlation Between Lumia and Fidelity International
Can any of the company-specific risk be diversified away by investing in both Lumia and Fidelity 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 Lumia and Fidelity International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumia and Fidelity International Real, you can compare the effects of market volatilities on Lumia and Fidelity 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 Lumia with a short position of Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and Fidelity International.
Diversification Opportunities for Lumia and Fidelity International
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lumia and Fidelity is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Fidelity International Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and Lumia 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 Lumia are associated (or correlated) with Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of Lumia i.e., Lumia and Fidelity International go up and down completely randomly.
Pair Corralation between Lumia and Fidelity International
Assuming the 90 days trading horizon Lumia is expected to under-perform the Fidelity International. In addition to that, Lumia is 10.49 times more volatile than Fidelity International Real. It trades about -0.07 of its total potential returns per unit of risk. Fidelity International Real is currently generating about 0.03 per unit of volatility. If you would invest 872.00 in Fidelity International Real on October 21, 2024 and sell it today you would earn a total of 3.00 from holding Fidelity International Real or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Lumia vs. Fidelity International Real
Performance |
| Timeline |
| Lumia |
| Fidelity International |
Lumia and Fidelity International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and Fidelity International
The main advantage of trading using opposite Lumia and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, Fidelity 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 Fidelity International will offset losses from the drop in Fidelity International's long position.The idea behind Lumia and Fidelity International Real 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.| Fidelity International vs. Great West Loomis Sayles | Fidelity International vs. Vanguard Small Cap Value | Fidelity International vs. Lsv Small Cap | Fidelity International vs. Applied Finance Explorer |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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