Correlation Between Fidelity ClearPath and CI Gold

Can any of the company-specific risk be diversified away by investing in both Fidelity ClearPath and CI Gold 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 Gold 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 Gold Bullion, you can compare the effects of market volatilities on Fidelity ClearPath and CI Gold 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 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity ClearPath and CI Gold.

Diversification Opportunities for Fidelity ClearPath and CI Gold

0.14

Correlation Coefficient

Fidelity ClearPath  CI Gold

Average diversification

The 3 months correlation between Fidelity and VALT-B is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity ClearPath 2045 and CI Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Gold Bullion 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 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Gold Bullion has no effect on the direction of Fidelity ClearPath i.e., Fidelity ClearPath and CI Gold go up and down completely randomly.

Pair Corralation between Fidelity ClearPath and CI Gold

Assuming the 90 days trading horizon Fidelity ClearPath is expected to generate 5.14 times less return on investment than CI Gold. But when comparing it to its historical volatility, Fidelity ClearPath 2045 is 1.03 times less risky than CI Gold. It trades about 0.05 of its potential returns per unit of risk. CI Gold Bullion is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  3,745  in CI Gold Bullion on December 26, 2024 and sell it today you would earn a total of  533.00  from holding CI Gold Bullion or generate 14.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Fidelity ClearPath 2045  vs.  CI Gold Bullion

Fidelity ClearPath 2045

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity ClearPath 2045 are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Fidelity ClearPath is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

CI Gold Bullion

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Gold Bullion are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating essential indicators, CI Gold sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity ClearPath and CI Gold

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

The idea behind Fidelity ClearPath 2045 and CI Gold Bullion 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.