Correlation Between Canadian High and Fidelity Tactical

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

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

Diversification Opportunities for Canadian High and Fidelity Tactical

0.0

Correlation Coefficient

Canadian High  Fidelity Tactical

Pay attention - limited upside

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

Pair Corralation between Canadian High and Fidelity Tactical

If you would invest  1,065  in Fidelity Tactical High on December 2, 2024 and sell it today you would earn a total of  21.00  from holding Fidelity Tactical High or generate 1.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Canadian High Income  vs.  Fidelity Tactical High

Canadian High Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canadian High Income has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Canadian High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Tactical High

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Tactical High are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Fidelity Tactical is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Canadian High and Fidelity Tactical

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

The idea behind Canadian High Income and Fidelity Tactical 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.