Correlation Between IShares SPTSX and Fidelity LongShort
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX and Fidelity LongShort 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 IShares SPTSX and Fidelity LongShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SPTSX Capped and Fidelity LongShort Alternative, you can compare the effects of market volatilities on IShares SPTSX and Fidelity LongShort 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 IShares SPTSX with a short position of Fidelity LongShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and Fidelity LongShort.
Diversification Opportunities for IShares SPTSX and Fidelity LongShort
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and Fidelity is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Capped and Fidelity LongShort Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity LongShort and IShares SPTSX 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 iShares SPTSX Capped are associated (or correlated) with Fidelity LongShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity LongShort has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and Fidelity LongShort go up and down completely randomly.
Pair Corralation between IShares SPTSX and Fidelity LongShort
Assuming the 90 days trading horizon iShares SPTSX Capped is expected to under-perform the Fidelity LongShort. In addition to that, IShares SPTSX is 1.75 times more volatile than Fidelity LongShort Alternative. It trades about -0.06 of its total potential returns per unit of risk. Fidelity LongShort Alternative is currently generating about 0.25 per unit of volatility. If you would invest 1,179 in Fidelity LongShort Alternative on November 7, 2024 and sell it today you would earn a total of 40.00 from holding Fidelity LongShort Alternative or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
iShares SPTSX Capped vs. Fidelity LongShort Alternative
Performance |
| Timeline |
| iShares SPTSX Capped |
| Fidelity LongShort |
IShares SPTSX and Fidelity LongShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and Fidelity LongShort
The main advantage of trading using opposite IShares SPTSX and Fidelity LongShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX position performs unexpectedly, Fidelity LongShort 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 LongShort will offset losses from the drop in Fidelity LongShort's long position.| IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Global | IShares SPTSX vs. iShares SPTSX 60 | IShares SPTSX vs. iShares SPTSX Capped |
| Fidelity LongShort vs. Fidelity Global Equity | Fidelity LongShort vs. Fidelity Global Value | Fidelity LongShort vs. Fidelity Momentum ETF | Fidelity LongShort vs. Fidelity Canadian High |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |