Correlation Between Fidelity Series and Oakmark International

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

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

Diversification Opportunities for Fidelity Series and Oakmark International

0.91

Correlation Coefficient

Fidelity Series  Oakmark International

Almost no diversification

The 3 months correlation between Fidelity and Oakmark is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series International and Oakmark International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Fidelity Series 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 Series International are associated (or correlated) with Oakmark International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark International has no effect on the direction of Fidelity Series i.e., Fidelity Series and Oakmark International go up and down completely randomly.

Pair Corralation between Fidelity Series and Oakmark International

Assuming the 90 days horizon Fidelity Series International is expected to generate 0.81 times more return on investment than Oakmark International. However, Fidelity Series International is 1.23 times less risky than Oakmark International. It trades about -0.03 of its potential returns per unit of risk. Oakmark International is currently generating about -0.04 per unit of risk. If you would invest  1,312  in Fidelity Series International on September 4, 2024 and sell it today you would lose (23.00) from holding Fidelity Series International or give up 1.75% of portfolio value over 90 days.

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

Fidelity Series International  vs.  Oakmark International

Fidelity Series Inte

Risk-Adjusted Performance

0 of 100

Very Weak

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

Oakmark International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oakmark International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Oakmark 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 Fidelity Series and Oakmark International

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

The idea behind Fidelity Series International and Oakmark International 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.