Correlation Between Europacific Growth and Fidelity International
Can any of the company-specific risk be diversified away by investing in both Europacific Growth 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 Europacific Growth and Fidelity International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and Fidelity International Capital, you can compare the effects of market volatilities on Europacific Growth 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 Europacific Growth with a short position of Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Fidelity International.
Diversification Opportunities for Europacific Growth and Fidelity International
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Europacific and Fidelity is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Fidelity International Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and Europacific Growth 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 Europacific Growth Fund 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 Europacific Growth i.e., Europacific Growth and Fidelity International go up and down completely randomly.
Pair Corralation between Europacific Growth and Fidelity International
Assuming the 90 days horizon Europacific Growth is expected to generate 2.31 times less return on investment than Fidelity International. But when comparing it to its historical volatility, Europacific Growth Fund is 1.05 times less risky than Fidelity International. It trades about 0.04 of its potential returns per unit of risk. Fidelity International Capital is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,910 in Fidelity International Capital on September 1, 2024 and sell it today you would earn a total of 41.00 from holding Fidelity International Capital or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Europacific Growth Fund vs. Fidelity International Capital
Performance |
| Timeline |
| Europacific Growth |
| Fidelity International |
Europacific Growth and Fidelity International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europacific Growth and Fidelity International
The main advantage of trading using opposite Europacific Growth and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth 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.| Europacific Growth vs. Vanguard Institutional Index | Europacific Growth vs. Vanguard Mid Cap Index | Europacific Growth vs. Washington Mutual Investors | Europacific Growth vs. Vanguard Small Cap Index |
| Fidelity International vs. Fidelity Worldwide Fund | Fidelity International vs. Fidelity Pacific Basin | Fidelity International vs. Fidelity Europe Fund | Fidelity International vs. Fidelity Japan 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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