Correlation Between Fidelity Active and Africa Opportunity

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

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

Diversification Opportunities for Fidelity Active and Africa Opportunity

0.0

Correlation Coefficient

Fidelity Active  Africa Opportunity

Pay attention - limited upside

The 3 months correlation between Fidelity and Africa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Active Strategy and Africa Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Africa Opportunity and Fidelity Active 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 Active Strategy are associated (or correlated) with Africa Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Africa Opportunity has no effect on the direction of Fidelity Active i.e., Fidelity Active and Africa Opportunity go up and down completely randomly.

Pair Corralation between Fidelity Active and Africa Opportunity

If you would invest  57.00  in Africa Opportunity on September 22, 2024 and sell it today you would earn a total of  8.00  from holding Africa Opportunity or generate 14.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fidelity Active Strategy  vs.  Africa Opportunity

Fidelity Active Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Active Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, Fidelity Active is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Africa Opportunity

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Africa Opportunity are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak technical and fundamental indicators, Africa Opportunity exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity Active and Africa Opportunity

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

The idea behind Fidelity Active Strategy and Africa Opportunity 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.