Correlation Between NYSE Composite and Fidelity Overseas
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fidelity Overseas 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 Overseas 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 Overseas Fund, you can compare the effects of market volatilities on NYSE Composite and Fidelity Overseas 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 Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Overseas.
Diversification Opportunities for NYSE Composite and Fidelity Overseas
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Fidelity is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fidelity Overseas Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Overseas 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 Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Overseas has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Overseas go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Overseas
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.9 times more return on investment than Fidelity Overseas. However, NYSE Composite is 1.11 times less risky than Fidelity Overseas. It trades about 0.11 of its potential returns per unit of risk. Fidelity Overseas Fund is currently generating about 0.08 per unit of risk. If you would invest 1,925,354 in NYSE Composite on November 1, 2024 and sell it today you would earn a total of 91,268 from holding NYSE Composite or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Fidelity Overseas Fund
Performance |
| Timeline |
NYSE Composite and Fidelity Overseas Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Overseas Fund
Pair trading matchups for Fidelity Overseas
Pair Trading with NYSE Composite and Fidelity Overseas
The main advantage of trading using opposite NYSE Composite and Fidelity Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fidelity Overseas 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 Overseas will offset losses from the drop in Fidelity Overseas' long position.| NYSE Composite vs. Western Copper and | NYSE Composite vs. Chemours Co | NYSE Composite vs. IPG Photonics | NYSE Composite vs. Morgan Advanced Materials |
| Fidelity Overseas vs. Fidelity Advisor Emerging | Fidelity Overseas vs. Fidelity Mega Cap | Fidelity Overseas vs. Fidelity International Discovery | Fidelity Overseas vs. Fidelity Advisor Health |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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