Correlation Between Liberty All and Fidelity China
Can any of the company-specific risk be diversified away by investing in both Liberty All 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 Liberty All and Fidelity China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty All Star and Fidelity China Region, you can compare the effects of market volatilities on Liberty All 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 Liberty All with a short position of Fidelity China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty All and Fidelity China.
Diversification Opportunities for Liberty All and Fidelity China
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liberty and Fidelity is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Liberty All Star 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 Liberty All 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 Liberty All Star 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 Liberty All i.e., Liberty All and Fidelity China go up and down completely randomly.
Pair Corralation between Liberty All and Fidelity China
Considering the 90-day investment horizon Liberty All Star is expected to generate 0.62 times more return on investment than Fidelity China. However, Liberty All Star is 1.61 times less risky than Fidelity China. It trades about 0.21 of its potential returns per unit of risk. Fidelity China Region is currently generating about -0.19 per unit of risk. If you would invest 699.00 in Liberty All Star on August 30, 2024 and sell it today you would earn a total of 29.00 from holding Liberty All Star or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty All Star vs. Fidelity China Region
Performance |
| Timeline |
| Liberty All Star |
| Fidelity China Region |
Liberty All and Fidelity China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty All and Fidelity China
The main advantage of trading using opposite Liberty All and Fidelity China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty All 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.| Liberty All vs. Adams Diversified Equity | Liberty All vs. BlackRock Science and | Liberty All vs. Virtus Allianzgi Artificial | Liberty All vs. Royce Value Closed |
| Fidelity China vs. Fidelity Emerging Asia | Fidelity China vs. Fidelity Emerging Markets | Fidelity China vs. Fidelity Canada Fund | Fidelity China vs. Fidelity Pacific Basin |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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