Correlation Between Fidelity Sai and IShares Global

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

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

Diversification Opportunities for Fidelity Sai and IShares Global

0.91

Correlation Coefficient

Fidelity Sai  IShares Global

Almost no diversification

The 3 months correlation between Fidelity and IShares is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sai International and iShares Global Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Clean and Fidelity Sai 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 Sai International are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Clean has no effect on the direction of Fidelity Sai i.e., Fidelity Sai and IShares Global go up and down completely randomly.

Pair Corralation between Fidelity Sai and IShares Global

Assuming the 90 days horizon Fidelity Sai International is expected to generate 0.54 times more return on investment than IShares Global. However, Fidelity Sai International is 1.86 times less risky than IShares Global. It trades about -0.03 of its potential returns per unit of risk. iShares Global Clean is currently generating about -0.14 per unit of risk. If you would invest  885.00  in Fidelity Sai International on September 5, 2024 and sell it today you would lose (17.00) from holding Fidelity Sai International or give up 1.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Fidelity Sai International  vs.  iShares Global Clean

Fidelity Sai Interna

Risk-Adjusted Performance

0 of 100

Very Weak

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

iShares Global Clean

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Global Clean has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Fidelity Sai and IShares Global

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

The idea behind Fidelity Sai International and iShares Global Clean 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.