Correlation Between NBI Active and Fidelity Global
Can any of the company-specific risk be diversified away by investing in both NBI Active and Fidelity Global 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 NBI Active and Fidelity Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBI Active Canadian and Fidelity Global Value, you can compare the effects of market volatilities on NBI Active and Fidelity Global 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 NBI Active with a short position of Fidelity Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Active and Fidelity Global.
Diversification Opportunities for NBI Active and Fidelity Global
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NBI and Fidelity is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding NBI Active Canadian and Fidelity Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Value and NBI Active 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 NBI Active Canadian are associated (or correlated) with Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Value has no effect on the direction of NBI Active i.e., NBI Active and Fidelity Global go up and down completely randomly.
Pair Corralation between NBI Active and Fidelity Global
Assuming the 90 days trading horizon NBI Active Canadian is expected to generate 0.23 times more return on investment than Fidelity Global. However, NBI Active Canadian is 4.26 times less risky than Fidelity Global. It trades about 0.43 of its potential returns per unit of risk. Fidelity Global Value is currently generating about 0.0 per unit of risk. If you would invest 2,394 in NBI Active Canadian on November 3, 2024 and sell it today you would earn a total of 58.00 from holding NBI Active Canadian or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBI Active Canadian vs. Fidelity Global Value
Performance |
| Timeline |
| NBI Active Canadian |
| Fidelity Global Value |
NBI Active and Fidelity Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI Active and Fidelity Global
The main advantage of trading using opposite NBI Active and Fidelity Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Active position performs unexpectedly, Fidelity Global 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 Global will offset losses from the drop in Fidelity Global's long position.| NBI Active vs. TD Active Preferred | NBI Active vs. RBC Canadian Preferred | NBI Active vs. Dynamic Active Preferred | NBI Active vs. NBI Global Real |
| Fidelity Global vs. Fidelity Global Equity | Fidelity Global vs. Fidelity Momentum ETF | Fidelity Global vs. Fidelity Canadian High | Fidelity Global vs. Fidelity All in One Balanced |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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