Correlation Between Fidelity Latin and T Rowe

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

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

Diversification Opportunities for Fidelity Latin and T Rowe

0.0

Correlation Coefficient

Fidelity Latin  T Rowe

Pay attention - limited upside

The 3 months correlation between Fidelity and TREMX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Latin America and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price and Fidelity Latin 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 Latin America are associated (or correlated) with T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Fidelity Latin i.e., Fidelity Latin and T Rowe go up and down completely randomly.

Pair Corralation between Fidelity Latin and T Rowe

If you would invest  531.00  in T Rowe Price on December 30, 2024 and sell it today you would earn a total of  35.00  from holding T Rowe Price or generate 6.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fidelity Latin America  vs.  T Rowe Price

Fidelity Latin America

Risk-Adjusted Performance

Very Weak

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

T Rowe Price

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, T Rowe may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fidelity Latin and T Rowe

The main advantage of trading using opposite Fidelity Latin and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Latin position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.

The idea behind Fidelity Latin America and T Rowe Price 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.