Correlation Between Europac Gold and Fidelity Asset

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

By analyzing existing cross correlation between Europac Gold Fund and Fidelity Asset Manager, you can compare the effects of market volatilities on Europac Gold and Fidelity Asset 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 Europac Gold with a short position of Fidelity Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and Fidelity Asset.

Diversification Opportunities for Europac Gold and Fidelity Asset

0.56

Correlation Coefficient

Europac Gold  Fidelity Asset

Very weak diversification

The 3 months correlation between Europac and Fidelity is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund and Fidelity Asset Manager in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Asset Manager and Europac Gold 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 Europac Gold Fund are associated (or correlated) with Fidelity Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Asset Manager has no effect on the direction of Europac Gold i.e., Europac Gold and Fidelity Asset go up and down completely randomly.

Pair Corralation between Europac Gold and Fidelity Asset

Assuming the 90 days horizon Europac Gold Fund is expected to generate 5.76 times more return on investment than Fidelity Asset. However, Europac Gold is 5.76 times more volatile than Fidelity Asset Manager. It trades about 0.24 of its potential returns per unit of risk. Fidelity Asset Manager is currently generating about 0.07 per unit of risk. If you would invest  924.00  in Europac Gold Fund on December 21, 2024 and sell it today you would earn a total of  234.00  from holding Europac Gold Fund or generate 25.32% return on investment over 90 days.

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

Europac Gold Fund  vs.  Fidelity Asset Manager

Europac Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Europac Gold Fund are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Europac Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Asset Manager

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Asset Manager are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Europac Gold and Fidelity Asset

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

The idea behind Europac Gold Fund and Fidelity Asset Manager 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.