Correlation Between Touchstone Large and Fidelity China
Can any of the company-specific risk be diversified away by investing in both Touchstone Large 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 Touchstone Large and Fidelity China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Large Cap and Fidelity China Region, you can compare the effects of market volatilities on Touchstone Large 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 Touchstone Large with a short position of Fidelity China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Fidelity China.
Diversification Opportunities for Touchstone Large and Fidelity China
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Touchstone and Fidelity is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap 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 Touchstone Large 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 Touchstone Large Cap 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 Touchstone Large i.e., Touchstone Large and Fidelity China go up and down completely randomly.
Pair Corralation between Touchstone Large and Fidelity China
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 0.54 times more return on investment than Fidelity China. However, Touchstone Large Cap is 1.86 times less risky than Fidelity China. It trades about 0.37 of its potential returns per unit of risk. Fidelity China Region is currently generating about -0.12 per unit of risk. If you would invest 1,950 in Touchstone Large Cap on September 1, 2024 and sell it today you would earn a total of 117.00 from holding Touchstone Large Cap or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Touchstone Large Cap vs. Fidelity China Region
Performance |
| Timeline |
| Touchstone Large Cap |
| Fidelity China Region |
Touchstone Large and Fidelity China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Fidelity China
The main advantage of trading using opposite Touchstone Large and Fidelity China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large 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.| Touchstone Large vs. Touchstone Small Cap | Touchstone Large vs. Mid Cap Growth | Touchstone Large vs. Mid Cap Growth | Touchstone Large vs. Mid Cap Growth |
| Fidelity China vs. Fidelity Freedom 2015 | Fidelity China vs. Fidelity Puritan Fund | Fidelity China vs. Fidelity Puritan Fund | Fidelity China vs. Fidelity Pennsylvania Municipal |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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