Correlation Between Ninepoint Energy and Fidelity Global

Can any of the company-specific risk be diversified away by investing in both Ninepoint Energy and Fidelity Global 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 Ninepoint Energy and Fidelity Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ninepoint Energy and Fidelity Global Innovators, you can compare the effects of market volatilities on Ninepoint Energy and Fidelity Global 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 Ninepoint Energy with a short position of Fidelity Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ninepoint Energy and Fidelity Global.

Diversification Opportunities for Ninepoint Energy and Fidelity Global

-0.4

Correlation Coefficient

Ninepoint Energy  Fidelity Global

Very good diversification

The 3 months correlation between Ninepoint and Fidelity is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ninepoint Energy and Fidelity Global Innovators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Inno and Ninepoint Energy 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 Ninepoint Energy are associated (or correlated) with Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Inno has no effect on the direction of Ninepoint Energy i.e., Ninepoint Energy and Fidelity Global go up and down completely randomly.

Pair Corralation between Ninepoint Energy and Fidelity Global

Assuming the 90 days trading horizon Ninepoint Energy is expected to under-perform the Fidelity Global. In addition to that, Ninepoint Energy is 1.37 times more volatile than Fidelity Global Innovators. It trades about -0.08 of its total potential returns per unit of risk. Fidelity Global Innovators is currently generating about 0.21 per unit of volatility. If you would invest  3,736  in Fidelity Global Innovators on October 10, 2024 and sell it today you would earn a total of  607.00  from holding Fidelity Global Innovators or generate 16.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ninepoint Energy  vs.  Fidelity Global Innovators

Ninepoint Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ninepoint Energy has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Fidelity Global Inno

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Global Innovators are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Fidelity Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ninepoint Energy and Fidelity Global

The main advantage of trading using opposite Ninepoint Energy and Fidelity Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ninepoint Energy position performs unexpectedly, Fidelity Global 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 Global will offset losses from the drop in Fidelity Global's long position.

The idea behind Ninepoint Energy and Fidelity Global Innovators pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.