Correlation Between Fidelity Founders and Fidelity Intl

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

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

Diversification Opportunities for Fidelity Founders and Fidelity Intl

-0.24

Correlation Coefficient

Fidelity Founders  Fidelity Intl

Very good diversification

The 3 months correlation between Fidelity and Fidelity is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Founders and Fidelity Intl Sustainability in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Intl Sustai and Fidelity Founders 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 Founders are associated (or correlated) with Fidelity Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Intl Sustai has no effect on the direction of Fidelity Founders i.e., Fidelity Founders and Fidelity Intl go up and down completely randomly.

Pair Corralation between Fidelity Founders and Fidelity Intl

Assuming the 90 days horizon Fidelity Founders is expected to under-perform the Fidelity Intl. In addition to that, Fidelity Founders is 1.75 times more volatile than Fidelity Intl Sustainability. It trades about -0.08 of its total potential returns per unit of risk. Fidelity Intl Sustainability is currently generating about 0.15 per unit of volatility. If you would invest  1,218  in Fidelity Intl Sustainability on December 21, 2024 and sell it today you would earn a total of  91.00  from holding Fidelity Intl Sustainability or generate 7.47% return on investment over 90 days.

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

Fidelity Founders  vs.  Fidelity Intl Sustainability

Fidelity Founders

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Founders has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Fidelity Intl Sustai

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Intl Sustainability are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Fidelity Intl may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fidelity Founders and Fidelity Intl

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

The idea behind Fidelity Founders and Fidelity Intl Sustainability 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.