Correlation Between Fidelity Series and International Investors

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

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

Diversification Opportunities for Fidelity Series and International Investors

-0.34

Correlation Coefficient

Fidelity Series  International Investors

Very good diversification

The 3 months correlation between Fidelity and International is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series Total and International Investors Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Investors and Fidelity Series 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 Series Total are associated (or correlated) with International Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Investors has no effect on the direction of Fidelity Series i.e., Fidelity Series and International Investors go up and down completely randomly.

Pair Corralation between Fidelity Series and International Investors

Assuming the 90 days horizon Fidelity Series Total is expected to under-perform the International Investors. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Series Total is 1.57 times less risky than International Investors. The mutual fund trades about -0.07 of its potential returns per unit of risk. The International Investors Gold is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  843.00  in International Investors Gold on December 24, 2024 and sell it today you would earn a total of  243.00  from holding International Investors Gold or generate 28.83% return on investment over 90 days.

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

Fidelity Series Total  vs.  International Investors Gold

Fidelity Series Total

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Series Total has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Fidelity Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

International Investors

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in International Investors Gold are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, International Investors showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity Series and International Investors

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

The idea behind Fidelity Series Total and International Investors Gold 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..