Correlation Between NYSE Composite and Fidelity Europe
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fidelity Europe 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 NYSE Composite and Fidelity Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Fidelity Europe Fund, you can compare the effects of market volatilities on NYSE Composite and Fidelity Europe 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 NYSE Composite with a short position of Fidelity Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Europe.
Diversification Opportunities for NYSE Composite and Fidelity Europe
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Fidelity is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fidelity Europe Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Europe and NYSE Composite 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 NYSE Composite are associated (or correlated) with Fidelity Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Europe has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Europe go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Europe
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.72 times more return on investment than Fidelity Europe. However, NYSE Composite is 1.39 times less risky than Fidelity Europe. It trades about 0.17 of its potential returns per unit of risk. Fidelity Europe Fund is currently generating about -0.12 per unit of risk. If you would invest 1,901,742 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 125,462 from holding NYSE Composite or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Fidelity Europe Fund
Performance |
| Timeline |
NYSE Composite and Fidelity Europe Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Europe Fund
Pair trading matchups for Fidelity Europe
Pair Trading with NYSE Composite and Fidelity Europe
The main advantage of trading using opposite NYSE Composite and Fidelity Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fidelity Europe 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 Europe will offset losses from the drop in Fidelity Europe's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Fidelity Europe vs. Fidelity Advisor Gold | Fidelity Europe vs. Gamco Global Gold | Fidelity Europe vs. Sprott Gold Equity | Fidelity Europe vs. International Investors Gold |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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