Correlation Between Strategic Advisers and Fidelity International

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

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

Diversification Opportunities for Strategic Advisers and Fidelity International

-0.39

Correlation Coefficient

Strategic Advisers  Fidelity International

Very good diversification

The 3 months correlation between Strategic and Fidelity is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Advisers Tax Sensiti and Fidelity International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and Strategic Advisers 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 Strategic Advisers Tax Sensitive 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 Strategic Advisers i.e., Strategic Advisers and Fidelity International go up and down completely randomly.

Pair Corralation between Strategic Advisers and Fidelity International

Assuming the 90 days horizon Strategic Advisers Tax Sensitive is expected to generate 0.08 times more return on investment than Fidelity International. However, Strategic Advisers Tax Sensitive is 11.78 times less risky than Fidelity International. It trades about 0.11 of its potential returns per unit of risk. Fidelity International Growth is currently generating about -0.01 per unit of risk. If you would invest  998.00  in Strategic Advisers Tax Sensitive on August 31, 2024 and sell it today you would earn a total of  5.00  from holding Strategic Advisers Tax Sensitive or generate 0.5% return on investment over 90 days.

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

Strategic Advisers Tax Sensiti  vs.  Fidelity International Growth

Strategic Advisers Tax

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Advisers Tax Sensitive are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Strategic Advisers is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Fidelity International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Strategic Advisers and Fidelity International

The main advantage of trading using opposite Strategic Advisers and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Advisers 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 Strategic Advisers Tax Sensitive and Fidelity International Growth 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.