Correlation Between Global X and Fidelity International

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

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

Diversification Opportunities for Global X and Fidelity International

-0.37

Correlation Coefficient

Global X  Fidelity International

Very good diversification

The 3 months correlation between Global and Fidelity is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Global X Semiconductor and Fidelity International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and Global X 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 Global X Semiconductor 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 Global X i.e., Global X and Fidelity International go up and down completely randomly.

Pair Corralation between Global X and Fidelity International

Assuming the 90 days trading horizon Global X Semiconductor is expected to under-perform the Fidelity International. In addition to that, Global X is 2.92 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 0.11 per unit of volatility. If you would invest  3,901  in Fidelity International High on December 29, 2024 and sell it today you would earn a total of  204.00  from holding Fidelity International High or generate 5.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Global X Semiconductor  vs.  Fidelity International High

Global X Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Fidelity International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity International High are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Fidelity International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Global X and Fidelity International

The main advantage of trading using opposite Global X and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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 Global X Semiconductor 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.