Correlation Between Seafarer Overseas and Fidelity China
Can any of the company-specific risk be diversified away by investing in both Seafarer Overseas and Fidelity China 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 Seafarer Overseas and Fidelity China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seafarer Overseas Value and Fidelity China Region, you can compare the effects of market volatilities on Seafarer Overseas and Fidelity China 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 Seafarer Overseas with a short position of Fidelity China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seafarer Overseas and Fidelity China.
Diversification Opportunities for Seafarer Overseas and Fidelity China
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seafarer and Fidelity is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Seafarer Overseas Value and Fidelity China Region in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity China Region and Seafarer Overseas 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 Seafarer Overseas Value are associated (or correlated) with Fidelity China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity China Region has no effect on the direction of Seafarer Overseas i.e., Seafarer Overseas and Fidelity China go up and down completely randomly.
Pair Corralation between Seafarer Overseas and Fidelity China
Assuming the 90 days horizon Seafarer Overseas is expected to generate 3.13 times less return on investment than Fidelity China. But when comparing it to its historical volatility, Seafarer Overseas Value is 2.0 times less risky than Fidelity China. It trades about 0.03 of its potential returns per unit of risk. Fidelity China Region is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,256 in Fidelity China Region on August 31, 2024 and sell it today you would earn a total of 613.00 from holding Fidelity China Region or generate 18.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seafarer Overseas Value vs. Fidelity China Region
Performance |
| Timeline |
| Seafarer Overseas Value |
| Fidelity China Region |
Seafarer Overseas and Fidelity China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seafarer Overseas and Fidelity China
The main advantage of trading using opposite Seafarer Overseas and Fidelity China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seafarer Overseas position performs unexpectedly, Fidelity China 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 China will offset losses from the drop in Fidelity China's long position.| Seafarer Overseas vs. Eventide Healthcare Life | Seafarer Overseas vs. Lord Abbett Health | Seafarer Overseas vs. Blackrock Health Sciences | Seafarer Overseas vs. Hartford Healthcare Hls |
| Fidelity China vs. Nationwide Growth Fund | Fidelity China vs. T Rowe Price | Fidelity China vs. Legg Mason Partners | Fidelity China vs. Rational Defensive Growth |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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