Correlation Between NYSE Composite and Fidelity Worldwide
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fidelity Worldwide 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 Worldwide 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 Worldwide Fund, you can compare the effects of market volatilities on NYSE Composite and Fidelity Worldwide 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 Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Worldwide.
Diversification Opportunities for NYSE Composite and Fidelity Worldwide
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Fidelity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fidelity Worldwide Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Worldwide 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 Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Worldwide has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Worldwide go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Worldwide
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.68 times more return on investment than Fidelity Worldwide. However, NYSE Composite is 1.46 times less risky than Fidelity Worldwide. It trades about 0.24 of its potential returns per unit of risk. Fidelity Worldwide Fund is currently generating about 0.12 per unit of risk. If you would invest 1,945,627 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 66,718 from holding NYSE Composite or generate 3.43% 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 Worldwide Fund
Performance |
| Timeline |
NYSE Composite and Fidelity Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Worldwide Fund
Pair trading matchups for Fidelity Worldwide
Pair Trading with NYSE Composite and Fidelity Worldwide
The main advantage of trading using opposite NYSE Composite and Fidelity Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fidelity Worldwide 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 Worldwide will offset losses from the drop in Fidelity Worldwide's long position.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| Fidelity Worldwide vs. Fidelity Pacific Basin | Fidelity Worldwide vs. Fidelity Europe Fund | Fidelity Worldwide vs. Fidelity International Capital | Fidelity Worldwide vs. Fidelity Overseas Fund |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |