Correlation Between NYSE Composite and Fidelity International
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Fidelity International 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 International Real, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity International.
Diversification Opportunities for NYSE Composite and Fidelity International
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Fidelity is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fidelity International Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International 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 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 NYSE Composite i.e., NYSE Composite and Fidelity International go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity International
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.78 times more return on investment than Fidelity International. However, NYSE Composite is 1.28 times less risky than Fidelity International. It trades about -0.04 of its potential returns per unit of risk. Fidelity International Real is currently generating about -0.08 per unit of risk. If you would invest 1,984,542 in NYSE Composite on September 14, 2024 and sell it today you would lose (7,633) from holding NYSE Composite or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Fidelity International Real
Performance |
| Timeline |
NYSE Composite and Fidelity International Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity International Real
Pair trading matchups for Fidelity International
Pair Trading with NYSE Composite and Fidelity International
The main advantage of trading using opposite NYSE Composite and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Air Products and | NYSE Composite vs. Allient | NYSE Composite vs. Ecovyst | NYSE Composite vs. CTS Corporation |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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