Correlation Between Fidelity Sustainable and St Galler

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

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

Diversification Opportunities for Fidelity Sustainable and St Galler

0.2

Correlation Coefficient

Fidelity Sustainable  St Galler

Modest diversification

The 3 months correlation between Fidelity and 0QQZ is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sustainable USD and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank and Fidelity Sustainable 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 Sustainable USD are associated (or correlated) with St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of Fidelity Sustainable i.e., Fidelity Sustainable and St Galler go up and down completely randomly.

Pair Corralation between Fidelity Sustainable and St Galler

Assuming the 90 days trading horizon Fidelity Sustainable USD is expected to generate 0.55 times more return on investment than St Galler. However, Fidelity Sustainable USD is 1.82 times less risky than St Galler. It trades about 0.08 of its potential returns per unit of risk. St Galler Kantonalbank is currently generating about -0.01 per unit of risk. If you would invest  350.00  in Fidelity Sustainable USD on December 2, 2024 and sell it today you would earn a total of  45.00  from holding Fidelity Sustainable USD or generate 12.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.47%
Values	Daily Returns

Fidelity Sustainable USD  vs.  St Galler Kantonalbank

Fidelity Sustainable USD

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sustainable USD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Fidelity Sustainable is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

St Galler Kantonalbank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in St Galler Kantonalbank are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, St Galler may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fidelity Sustainable and St Galler

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

The idea behind Fidelity Sustainable USD and St Galler Kantonalbank 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.