Correlation Between AXA World and Fidelity America

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

By analyzing existing cross correlation between AXA World Funds and Fidelity America AD, you can compare the effects of market volatilities on AXA World and Fidelity America 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 AXA World with a short position of Fidelity America. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXA World and Fidelity America.

Diversification Opportunities for AXA World and Fidelity America

-0.22

Correlation Coefficient

AXA World  Fidelity America

Very good diversification

The 3 months correlation between AXA and Fidelity is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding AXA World Funds and Fidelity America AD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity America and AXA World 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 AXA World Funds are associated (or correlated) with Fidelity America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity America has no effect on the direction of AXA World i.e., AXA World and Fidelity America go up and down completely randomly.

Pair Corralation between AXA World and Fidelity America

If you would invest  1,425  in Fidelity America AD on October 11, 2024 and sell it today you would earn a total of  159.00  from holding Fidelity America AD or generate 11.16% return on investment over 90 days.

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

AXA World Funds  vs.  Fidelity America AD

AXA World Funds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AXA World Funds has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, AXA World is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Fidelity America

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity America AD are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sluggish technical and fundamental indicators, Fidelity America may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AXA World and Fidelity America

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

The idea behind AXA World Funds and Fidelity America AD 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.

Check out your portfolio center.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.