Correlation Between Evolve Banks and Fidelity International

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

By analyzing existing cross correlation between Evolve Banks Enhanced and Fidelity International High, you can compare the effects of market volatilities on Evolve Banks and Fidelity International 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 Evolve Banks with a short position of Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolve Banks and Fidelity International.

Diversification Opportunities for Evolve Banks and Fidelity International

0.49

Correlation Coefficient

Evolve Banks  Fidelity International

Very weak diversification

The 3 months correlation between Evolve and Fidelity is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Evolve Banks Enhanced and Fidelity International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and Evolve Banks 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 Evolve Banks Enhanced are associated (or correlated) with Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of Evolve Banks i.e., Evolve Banks and Fidelity International go up and down completely randomly.

Pair Corralation between Evolve Banks and Fidelity International

Assuming the 90 days trading horizon Evolve Banks is expected to generate 1.97 times less return on investment than Fidelity International. In addition to that, Evolve Banks is 1.55 times more volatile than Fidelity International High. It trades about 0.08 of its total potential returns per unit of risk. Fidelity International High is currently generating about 0.25 per unit of volatility. If you would invest  2,654  in Fidelity International High on December 2, 2024 and sell it today you would earn a total of  207.00  from holding Fidelity International High or generate 7.8% return on investment over 90 days.

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

Evolve Banks Enhanced  vs.  Fidelity International High

Evolve Banks Enhanced

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evolve Banks Enhanced has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Evolve Banks is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Fidelity International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity International High are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fidelity International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Evolve Banks and Fidelity International

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

The idea behind Evolve Banks Enhanced and Fidelity International High 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.