Correlation Between Fidelity New and Global X

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

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

Diversification Opportunities for Fidelity New and Global X

0.46

Correlation Coefficient

Fidelity New  Global X

Very weak diversification

The 3 months correlation between Fidelity and Global is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity New Millennium and Global X Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Thematic and Fidelity New 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 New Millennium are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Thematic has no effect on the direction of Fidelity New i.e., Fidelity New and Global X go up and down completely randomly.

Pair Corralation between Fidelity New and Global X

If you would invest  2,424  in Global X Thematic on September 16, 2024 and sell it today you would earn a total of  60.00  from holding Global X Thematic or generate 2.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Fidelity New Millennium  vs.  Global X Thematic

Fidelity New Millennium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity New Millennium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Fidelity New is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Global X Thematic

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Thematic are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Global X is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Fidelity New and Global X

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

The idea behind Fidelity New Millennium and Global X Thematic 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.