Correlation Between Fidelity America and BlackRock Global

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

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

Diversification Opportunities for Fidelity America and BlackRock Global

-0.16

Correlation Coefficient

Fidelity America  BlackRock Global

Good diversification

The 3 months correlation between Fidelity and BlackRock is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity America AD and BlackRock Global Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Global Funds and Fidelity America 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 America AD are associated (or correlated) with BlackRock Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Global Funds has no effect on the direction of Fidelity America i.e., Fidelity America and BlackRock Global go up and down completely randomly.

Pair Corralation between Fidelity America and BlackRock Global

Assuming the 90 days trading horizon Fidelity America AD is expected to under-perform the BlackRock Global. But the fund apears to be less risky and, when comparing its historical volatility, Fidelity America AD is 1.31 times less risky than BlackRock Global. The fund trades about -0.01 of its potential returns per unit of risk. The BlackRock Global Funds is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  5,066  in BlackRock Global Funds on October 11, 2024 and sell it today you would lose (16.00) from holding BlackRock Global Funds or give up 0.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.44%
Values	Daily Returns

Fidelity America AD  vs.  BlackRock Global Funds

Fidelity America

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity America AD are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sluggish technical and fundamental indicators, Fidelity America may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BlackRock Global Funds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Global Funds has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady basic indicators, BlackRock Global is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Fidelity America and BlackRock Global

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

The idea behind Fidelity America AD and BlackRock Global Funds 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.