Correlation Between Fidelity Dividend and Fidelity International

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

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

Diversification Opportunities for Fidelity Dividend and Fidelity International

0.08

Correlation Coefficient

Fidelity Dividend  Fidelity International

Significant diversification

The 3 months correlation between Fidelity and Fidelity is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Dividend ETF and Fidelity International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and Fidelity Dividend 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 Dividend ETF are associated (or correlated) with Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of Fidelity Dividend i.e., Fidelity Dividend and Fidelity International go up and down completely randomly.

Pair Corralation between Fidelity Dividend and Fidelity International

Given the investment horizon of 90 days Fidelity Dividend ETF is expected to generate 0.88 times more return on investment than Fidelity International. However, Fidelity Dividend ETF is 1.13 times less risky than Fidelity International. It trades about 0.08 of its potential returns per unit of risk. Fidelity International High is currently generating about 0.03 per unit of risk. If you would invest  3,880  in Fidelity Dividend ETF on October 12, 2024 and sell it today you would earn a total of  1,284  from holding Fidelity Dividend ETF or generate 33.09% return on investment over 90 days.

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

Fidelity Dividend ETF  vs.  Fidelity International High

Fidelity Dividend ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Dividend ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Fidelity Dividend is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Fidelity International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity International High has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

Pair Trading with Fidelity Dividend and Fidelity International

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

The idea behind Fidelity Dividend ETF and Fidelity 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.