Correlation Between Fidelity Sustainable and Fidelity All

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

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

Diversification Opportunities for Fidelity Sustainable and Fidelity All

0.93

Correlation Coefficient

Fidelity Sustainable  Fidelity All

Almost no diversification

The 3 months correlation between Fidelity and Fidelity is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sustainable World and Fidelity All in One Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity All in and Fidelity Sustainable 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 Sustainable World are associated (or correlated) with Fidelity All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity All in has no effect on the direction of Fidelity Sustainable i.e., Fidelity Sustainable and Fidelity All go up and down completely randomly.

Pair Corralation between Fidelity Sustainable and Fidelity All

Assuming the 90 days trading horizon Fidelity Sustainable World is expected to generate 1.48 times more return on investment than Fidelity All. However, Fidelity Sustainable is 1.48 times more volatile than Fidelity All in One Balanced. It trades about 0.3 of its potential returns per unit of risk. Fidelity All in One Balanced is currently generating about 0.31 per unit of risk. If you would invest  4,315  in Fidelity Sustainable World on September 5, 2024 and sell it today you would earn a total of  534.00  from holding Fidelity Sustainable World or generate 12.38% return on investment over 90 days.

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

Fidelity Sustainable World  vs.  Fidelity All in One Balanced

Fidelity Sustainable

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sustainable World are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Fidelity Sustainable may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity All in

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity All in One Balanced are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Fidelity All may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Fidelity Sustainable and Fidelity All

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

The idea behind Fidelity Sustainable World and Fidelity All in One Balanced 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.