Correlation Between Fidelity Series and Westcore Global

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

By analyzing existing cross correlation between Fidelity Series 1000 and Westcore Global Large Cap, you can compare the effects of market volatilities on Fidelity Series and Westcore Global 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 Westcore Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and Westcore Global.

Diversification Opportunities for Fidelity Series and Westcore Global

0.8

Correlation Coefficient

Fidelity Series  Westcore Global

Very poor diversification

The 3 months correlation between Fidelity and Westcore is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series 1000 and Westcore Global Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westcore Global Large 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 1000 are associated (or correlated) with Westcore Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westcore Global Large has no effect on the direction of Fidelity Series i.e., Fidelity Series and Westcore Global go up and down completely randomly.

Pair Corralation between Fidelity Series and Westcore Global

Assuming the 90 days horizon Fidelity Series 1000 is expected to generate 0.77 times more return on investment than Westcore Global. However, Fidelity Series 1000 is 1.29 times less risky than Westcore Global. It trades about -0.46 of its potential returns per unit of risk. Westcore Global Large Cap is currently generating about -0.42 per unit of risk. If you would invest  1,783  in Fidelity Series 1000 on October 5, 2024 and sell it today you would lose (154.00) from holding Fidelity Series 1000 or give up 8.64% of portfolio value over 90 days.

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

Fidelity Series 1000  vs.  Westcore Global Large Cap

Fidelity Series 1000

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Series 1000 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.

Westcore Global Large

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Westcore Global Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Westcore Global 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 Westcore Global

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

The idea behind Fidelity Series 1000 and Westcore Global Large Cap 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.