Correlation Between Fidelity ClearPath and Edgepoint Global

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Can any of the company-specific risk be diversified away by investing in both Fidelity ClearPath and Edgepoint 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 Fidelity ClearPath and Edgepoint Global 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 Edgepoint Global Portfolio, you can compare the effects of market volatilities on Fidelity ClearPath and Edgepoint 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 Fidelity ClearPath with a short position of Edgepoint Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity ClearPath and Edgepoint Global.

Diversification Opportunities for Fidelity ClearPath and Edgepoint Global

FidelityEdgepointDiversified AwayFidelityEdgepointDiversified Away100%
0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Fidelity and Edgepoint is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity ClearPath 2045 and Edgepoint Global Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgepoint Global Por 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 Edgepoint Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgepoint Global Por has no effect on the direction of Fidelity ClearPath i.e., Fidelity ClearPath and Edgepoint Global go up and down completely randomly.

Pair Corralation between Fidelity ClearPath and Edgepoint Global

Assuming the 90 days trading horizon Fidelity ClearPath 2045 is expected to generate 1.31 times more return on investment than Edgepoint Global. However, Fidelity ClearPath is 1.31 times more volatile than Edgepoint Global Portfolio. It trades about -0.01 of its potential returns per unit of risk. Edgepoint Global Portfolio is currently generating about -0.02 per unit of risk. If you would invest  2,773  in Fidelity ClearPath 2045 on November 22, 2024 and sell it today you would lose (29.00) from holding Fidelity ClearPath 2045 or give up 1.05% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Fidelity ClearPath 2045  vs.  Edgepoint Global Portfolio

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -6-4-2024
JavaScript chart by amCharts 3.21.150P00007694 0P0000JO4E
       Timeline  
Fidelity ClearPath 2045 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Fidelity ClearPath 2045 has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Fidelity ClearPath is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2626.52727.52828.5
Edgepoint Global Por 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Edgepoint Global Portfolio has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady forward-looking indicators, Edgepoint Global is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb36.53737.53838.53939.5

Fidelity ClearPath and Edgepoint Global Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.62-1.21-0.8-0.39-0.02030.30.711.121.531.94 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.150P00007694 0P0000JO4E
       Returns  

Pair Trading with Fidelity ClearPath and Edgepoint Global

The main advantage of trading using opposite Fidelity ClearPath and Edgepoint Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity ClearPath position performs unexpectedly, Edgepoint 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 Edgepoint Global will offset losses from the drop in Edgepoint Global's long position.
The idea behind Fidelity ClearPath 2045 and Edgepoint Global Portfolio 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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