Correlation Between Fidelity New and Eaton Vance

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

By analyzing existing cross correlation between Fidelity New Markets and Eaton Vance Worldwide, you can compare the effects of market volatilities on Fidelity New and Eaton Vance 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 New with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity New and Eaton Vance.

Diversification Opportunities for Fidelity New and Eaton Vance

0.3

Correlation Coefficient

Fidelity New  Eaton Vance

Weak diversification

The 3 months correlation between Fidelity and Eaton is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Markets and Eaton Vance Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Worldwide and Fidelity New 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 New Markets are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Worldwide has no effect on the direction of Fidelity New i.e., Fidelity New and Eaton Vance go up and down completely randomly.

Pair Corralation between Fidelity New and Eaton Vance

Assuming the 90 days horizon Fidelity New Markets is expected to generate 0.52 times more return on investment than Eaton Vance. However, Fidelity New Markets is 1.91 times less risky than Eaton Vance. It trades about 0.08 of its potential returns per unit of risk. Eaton Vance Worldwide is currently generating about 0.01 per unit of risk. If you would invest  1,094  in Fidelity New Markets on October 9, 2024 and sell it today you would earn a total of  177.00  from holding Fidelity New Markets or generate 16.18% return on investment over 90 days.

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

Fidelity New Markets  vs.  Eaton Vance Worldwide

Fidelity New Markets

Risk-Adjusted Performance

0 of 100

Very Weak

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

Eaton Vance Worldwide

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Worldwide has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Fidelity New and Eaton Vance

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

The idea behind Fidelity New Markets and Eaton Vance Worldwide 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.