Correlation Between VanEck Digital and Fidelity Sustainable

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

By analyzing existing cross correlation between VanEck Digital Transformation and Fidelity Sustainable Core, you can compare the effects of market volatilities on VanEck Digital and Fidelity Sustainable 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 VanEck Digital with a short position of Fidelity Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Digital and Fidelity Sustainable.

Diversification Opportunities for VanEck Digital and Fidelity Sustainable

-0.7

Correlation Coefficient

VanEck Digital  Fidelity Sustainable

Excellent diversification

The 3 months correlation between VanEck and Fidelity is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Digital Transformation and Fidelity Sustainable Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sustainable Core and VanEck Digital 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 VanEck Digital Transformation are associated (or correlated) with Fidelity Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sustainable Core has no effect on the direction of VanEck Digital i.e., VanEck Digital and Fidelity Sustainable go up and down completely randomly.

Pair Corralation between VanEck Digital and Fidelity Sustainable

Given the investment horizon of 90 days VanEck Digital Transformation is expected to generate 11.81 times more return on investment than Fidelity Sustainable. However, VanEck Digital is 11.81 times more volatile than Fidelity Sustainable Core. It trades about 0.24 of its potential returns per unit of risk. Fidelity Sustainable Core is currently generating about 0.02 per unit of risk. If you would invest  977.00  in VanEck Digital Transformation on September 3, 2024 and sell it today you would earn a total of  903.00  from holding VanEck Digital Transformation or generate 92.43% return on investment over 90 days.

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

VanEck Digital Transformation  vs.  Fidelity Sustainable Core

VanEck Digital Trans

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Digital Transformation are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, VanEck Digital reported solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Sustainable Core

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sustainable Core are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Fidelity Sustainable is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VanEck Digital and Fidelity Sustainable

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

The idea behind VanEck Digital Transformation and Fidelity Sustainable Core 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.