Correlation Between Fidelity Dynamic and Dimensional International

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

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

Diversification Opportunities for Fidelity Dynamic and Dimensional International

-0.27

Correlation Coefficient

Fidelity Dynamic  Dimensional International

Very good diversification

The 3 months correlation between Fidelity and Dimensional is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Dynamic Buffered and Dimensional International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional International and Fidelity Dynamic 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 Fidelity Dynamic Buffered are associated (or correlated) with Dimensional International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional International has no effect on the direction of Fidelity Dynamic i.e., Fidelity Dynamic and Dimensional International go up and down completely randomly.

Pair Corralation between Fidelity Dynamic and Dimensional International

Given the investment horizon of 90 days Fidelity Dynamic Buffered is expected to under-perform the Dimensional International. But the etf apears to be less risky and, when comparing its historical volatility, Fidelity Dynamic Buffered is 1.1 times less risky than Dimensional International. The etf trades about -0.07 of its potential returns per unit of risk. The Dimensional International High is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  2,527  in Dimensional International High on December 22, 2024 and sell it today you would earn a total of  221.00  from holding Dimensional International High or generate 8.75% return on investment over 90 days.

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

Fidelity Dynamic Buffered  vs.  Dimensional International High

Fidelity Dynamic Buffered

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Dynamic Buffered has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Fidelity Dynamic is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Dimensional International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional International High are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical indicators, Dimensional International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fidelity Dynamic and Dimensional International

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

The idea behind Fidelity Dynamic Buffered and Dimensional 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.