Correlation Between Fidelity Series and Fidelity Emerging
Can any of the company-specific risk be diversified away by investing in both Fidelity Series and Fidelity Emerging 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 Fidelity Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Series Global and Fidelity Emerging Markets, you can compare the effects of market volatilities on Fidelity Series and Fidelity Emerging 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 Fidelity Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and Fidelity Emerging.
Diversification Opportunities for Fidelity Series and Fidelity Emerging
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series Global and Fidelity Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Emerging Markets 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 Global are associated (or correlated) with Fidelity Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Emerging Markets has no effect on the direction of Fidelity Series i.e., Fidelity Series and Fidelity Emerging go up and down completely randomly.
Pair Corralation between Fidelity Series and Fidelity Emerging
Assuming the 90 days horizon Fidelity Series Global is expected to generate 0.83 times more return on investment than Fidelity Emerging. However, Fidelity Series Global is 1.2 times less risky than Fidelity Emerging. It trades about 0.13 of its potential returns per unit of risk. Fidelity Emerging Markets is currently generating about 0.07 per unit of risk. If you would invest 1,420 in Fidelity Series Global on December 30, 2024 and sell it today you would earn a total of 97.00 from holding Fidelity Series Global or generate 6.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Fidelity Series Global vs. Fidelity Emerging Markets
Performance |
Timeline |
Fidelity Series Global |
Fidelity Emerging Markets |
Fidelity Series and Fidelity Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidelity Series and Fidelity Emerging
The main advantage of trading using opposite Fidelity Series and Fidelity Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Series position performs unexpectedly, Fidelity Emerging 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 Fidelity Emerging will offset losses from the drop in Fidelity Emerging's long position.Fidelity Series vs. Goldman Sachs Mlp | Fidelity Series vs. Blackrock All Cap Energy | Fidelity Series vs. Clearbridge Energy Mlp | Fidelity Series vs. Adams Natural Resources |
Fidelity Emerging vs. Fidelity International Index | Fidelity Emerging vs. Fidelity Real Estate | Fidelity Emerging vs. Fidelity Intermediate Treasury | Fidelity Emerging vs. Fidelity Inflation Protected Bond |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |