Correlation Between First Asset and Fidelity Canadian
Can any of the company-specific risk be diversified away by investing in both First Asset and Fidelity Canadian 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 First Asset and Fidelity Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Asset Morningstar and Fidelity Canadian Value, you can compare the effects of market volatilities on First Asset and Fidelity Canadian 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 First Asset with a short position of Fidelity Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Asset and Fidelity Canadian.
Diversification Opportunities for First Asset and Fidelity Canadian
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Fidelity is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding First Asset Morningstar and Fidelity Canadian Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canadian Value and First Asset 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 First Asset Morningstar are associated (or correlated) with Fidelity Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canadian Value has no effect on the direction of First Asset i.e., First Asset and Fidelity Canadian go up and down completely randomly.
Pair Corralation between First Asset and Fidelity Canadian
Assuming the 90 days trading horizon First Asset Morningstar is expected to generate 1.0 times more return on investment than Fidelity Canadian. However, First Asset is 1.0 times more volatile than Fidelity Canadian Value. It trades about 0.12 of its potential returns per unit of risk. Fidelity Canadian Value is currently generating about 0.08 per unit of risk. If you would invest 2,452 in First Asset Morningstar on August 26, 2024 and sell it today you would earn a total of 812.00 from holding First Asset Morningstar or generate 33.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Asset Morningstar vs. Fidelity Canadian Value
Performance |
| Timeline |
| First Asset Morningstar |
| Fidelity Canadian Value |
First Asset and Fidelity Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Asset and Fidelity Canadian
The main advantage of trading using opposite First Asset and Fidelity Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Asset position performs unexpectedly, Fidelity Canadian 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 Canadian will offset losses from the drop in Fidelity Canadian's long position.| First Asset vs. iShares SPTSX 60 | First Asset vs. iShares Core SP | First Asset vs. iShares SPTSX Composite | First Asset vs. iShares Core MSCI |
| Fidelity Canadian vs. iShares SPTSX 60 | Fidelity Canadian vs. iShares Core SP | Fidelity Canadian vs. iShares SPTSX Composite | Fidelity Canadian vs. iShares Core MSCI |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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