Correlation Between Fidelity ClearPath and CI Black

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

By analyzing existing cross correlation between Fidelity ClearPath 2045 and CI Black Creek, you can compare the effects of market volatilities on Fidelity ClearPath and CI Black 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 Fidelity ClearPath with a short position of CI Black. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity ClearPath and CI Black.

Diversification Opportunities for Fidelity ClearPath and CI Black

0.29

Correlation Coefficient

Fidelity ClearPath  CI Black

Modest diversification

The 3 months correlation between Fidelity and 0P0000752C is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity ClearPath 2045 and CI Black Creek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Black Creek and Fidelity ClearPath 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 Fidelity ClearPath 2045 are associated (or correlated) with CI Black. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Black Creek has no effect on the direction of Fidelity ClearPath i.e., Fidelity ClearPath and CI Black go up and down completely randomly.

Pair Corralation between Fidelity ClearPath and CI Black

Assuming the 90 days trading horizon Fidelity ClearPath 2045 is expected to generate 0.75 times more return on investment than CI Black. However, Fidelity ClearPath 2045 is 1.33 times less risky than CI Black. It trades about 0.21 of its potential returns per unit of risk. CI Black Creek is currently generating about -0.01 per unit of risk. If you would invest  2,592  in Fidelity ClearPath 2045 on September 3, 2024 and sell it today you would earn a total of  199.00  from holding Fidelity ClearPath 2045 or generate 7.68% return on investment over 90 days.

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

Fidelity ClearPath 2045  vs.  CI Black Creek

Fidelity ClearPath 2045

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity ClearPath 2045 are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, Fidelity ClearPath may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CI Black Creek

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CI Black Creek has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, CI Black is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity ClearPath and CI Black

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

The idea behind Fidelity ClearPath 2045 and CI Black Creek 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.