Correlation Between IShares Core and Fidelity LongShort
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 Core 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 Core SP and Fidelity LongShort Alternative, you can compare the effects of market volatilities on IShares Core 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 Core with a short position of Fidelity LongShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Fidelity LongShort.
Diversification Opportunities for IShares Core and Fidelity LongShort
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Fidelity is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP 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 Core 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 Core SP 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 Core i.e., IShares Core and Fidelity LongShort go up and down completely randomly.
Pair Corralation between IShares Core and Fidelity LongShort
Assuming the 90 days trading horizon iShares Core SP is expected to generate 1.36 times more return on investment than Fidelity LongShort. However, IShares Core is 1.36 times more volatile than Fidelity LongShort Alternative. It trades about 0.14 of its potential returns per unit of risk. Fidelity LongShort Alternative is currently generating about 0.18 per unit of risk. If you would invest 6,068 in iShares Core SP on August 25, 2024 and sell it today you would earn a total of 165.00 from holding iShares Core SP or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. Fidelity LongShort Alternative
Performance |
| Timeline |
| iShares Core SP |
| Fidelity LongShort |
IShares Core and Fidelity LongShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Fidelity LongShort
The main advantage of trading using opposite IShares Core and Fidelity LongShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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 Core vs. iShares SPTSX 60 | IShares Core vs. iShares MSCI EAFE | IShares Core vs. iShares Core SPTSX | IShares Core vs. iShares SPTSX Capped |
| Fidelity LongShort vs. Fidelity Global Value | Fidelity LongShort vs. Fidelity Momentum ETF | Fidelity LongShort vs. Fidelity Canadian High | Fidelity LongShort vs. Fidelity All in One Balanced |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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