Correlation Between IShares NASDAQ and Fidelity High
Can any of the company-specific risk be diversified away by investing in both IShares NASDAQ and Fidelity High 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 NASDAQ and Fidelity High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares NASDAQ 100 and Fidelity High Quality, you can compare the effects of market volatilities on IShares NASDAQ and Fidelity High 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 NASDAQ with a short position of Fidelity High. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares NASDAQ and Fidelity High.
Diversification Opportunities for IShares NASDAQ and Fidelity High
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iShares NASDAQ 100 and Fidelity High Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity High Quality and IShares NASDAQ 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 NASDAQ 100 are associated (or correlated) with Fidelity High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity High Quality has no effect on the direction of IShares NASDAQ i.e., IShares NASDAQ and Fidelity High go up and down completely randomly.
Pair Corralation between IShares NASDAQ and Fidelity High
Assuming the 90 days trading horizon iShares NASDAQ 100 is expected to generate 1.4 times more return on investment than Fidelity High. However, IShares NASDAQ is 1.4 times more volatile than Fidelity High Quality. It trades about 0.1 of its potential returns per unit of risk. Fidelity High Quality is currently generating about 0.11 per unit of risk. If you would invest 2,971 in iShares NASDAQ 100 on August 29, 2024 and sell it today you would earn a total of 2,246 from holding iShares NASDAQ 100 or generate 75.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares NASDAQ 100 vs. Fidelity High Quality
Performance |
| Timeline |
| iShares NASDAQ 100 |
| Fidelity High Quality |
IShares NASDAQ and Fidelity High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares NASDAQ and Fidelity High
The main advantage of trading using opposite IShares NASDAQ and Fidelity High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares NASDAQ position performs unexpectedly, Fidelity High 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 High will offset losses from the drop in Fidelity High's long position.| IShares NASDAQ vs. iShares Core SP | IShares NASDAQ vs. iShares SPTSX Capped | IShares NASDAQ vs. BMO NASDAQ 100 | IShares NASDAQ vs. Vanguard SP 500 |
| Fidelity High vs. Fidelity High Quality | Fidelity High vs. Fidelity International High | Fidelity High vs. Fidelity High Dividend | Fidelity High 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |