Correlation Between NYSE Composite and Fidelity Canada
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fidelity Canada 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 Canada 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 Canada Fund, you can compare the effects of market volatilities on NYSE Composite and Fidelity Canada 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 Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Canada.
Diversification Opportunities for NYSE Composite and Fidelity Canada
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Fidelity is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fidelity Canada Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canada 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 Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canada has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Canada go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Canada
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.92 times more return on investment than Fidelity Canada. However, NYSE Composite is 1.09 times less risky than Fidelity Canada. It trades about 0.15 of its potential returns per unit of risk. Fidelity Canada Fund is currently generating about 0.11 per unit of risk. If you would invest 1,906,443 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 115,502 from holding NYSE Composite or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Fidelity Canada Fund
Performance |
| Timeline |
NYSE Composite and Fidelity Canada Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Canada Fund
Pair trading matchups for Fidelity Canada
Pair Trading with NYSE Composite and Fidelity Canada
The main advantage of trading using opposite NYSE Composite and Fidelity Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fidelity Canada 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 Canada will offset losses from the drop in Fidelity Canada's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Fidelity Canada vs. Fidelity Emerging Asia | Fidelity Canada vs. Fidelity Emerging Markets | Fidelity Canada vs. Fidelity China Region | Fidelity Canada vs. Fidelity Leveraged Pany |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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