Correlation Between Strategic Allocation and Fidelity China
Can any of the company-specific risk be diversified away by investing in both Strategic Allocation 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 Strategic Allocation and Fidelity China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Allocation Moderate and Fidelity China Region, you can compare the effects of market volatilities on Strategic Allocation 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 Strategic Allocation with a short position of Fidelity China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Allocation and Fidelity China.
Diversification Opportunities for Strategic Allocation and Fidelity China
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Strategic and Fidelity is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Allocation Moderate 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 Strategic Allocation 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 Strategic Allocation Moderate 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 Strategic Allocation i.e., Strategic Allocation and Fidelity China go up and down completely randomly.
Pair Corralation between Strategic Allocation and Fidelity China
Assuming the 90 days horizon Strategic Allocation is expected to generate 1.2 times less return on investment than Fidelity China. But when comparing it to its historical volatility, Strategic Allocation Moderate is 2.71 times less risky than Fidelity China. It trades about 0.14 of its potential returns per unit of risk. Fidelity China Region is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,235 in Fidelity China Region on September 14, 2024 and sell it today you would earn a total of 730.00 from holding Fidelity China Region or generate 22.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Allocation Moderate vs. Fidelity China Region
Performance |
| Timeline |
| Strategic Allocation |
| Fidelity China Region |
Strategic Allocation and Fidelity China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Allocation and Fidelity China
The main advantage of trading using opposite Strategic Allocation and Fidelity China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Allocation 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.The idea behind Strategic Allocation Moderate and Fidelity China Region pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Fidelity China vs. Sa Worldwide Moderate | Fidelity China vs. Saat Moderate Strategy | Fidelity China vs. College Retirement Equities | Fidelity China vs. Strategic Allocation Moderate |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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