Correlation Between Fidelity Extended and Fidelity Emerging
Can any of the company-specific risk be diversified away by investing in both Fidelity Extended 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 Extended 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 Extended Market and Fidelity Emerging Markets, you can compare the effects of market volatilities on Fidelity Extended 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 Extended with a short position of Fidelity Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Extended and Fidelity Emerging.
Diversification Opportunities for Fidelity Extended and Fidelity Emerging
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Fidelity is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Extended Market 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 Extended 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 Extended Market 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 Extended i.e., Fidelity Extended and Fidelity Emerging go up and down completely randomly.
Pair Corralation between Fidelity Extended and Fidelity Emerging
Assuming the 90 days horizon Fidelity Extended Market is expected to under-perform the Fidelity Emerging. In addition to that, Fidelity Extended is 1.33 times more volatile than Fidelity Emerging Markets. It trades about -0.1 of its total potential returns per unit of risk. Fidelity Emerging Markets is currently generating about 0.07 per unit of volatility. If you would invest 1,048 in Fidelity Emerging Markets on December 30, 2024 and sell it today you would earn a total of 43.00 from holding Fidelity Emerging Markets or generate 4.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fidelity Extended Market vs. Fidelity Emerging Markets
Performance |
Timeline |
Fidelity Extended Market |
Fidelity Emerging Markets |
Fidelity Extended and Fidelity Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidelity Extended and Fidelity Emerging
The main advantage of trading using opposite Fidelity Extended and Fidelity Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Extended 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 Extended vs. Fidelity International Index | Fidelity Extended vs. Fidelity 500 Index | Fidelity Extended vs. Fidelity Bond Index | Fidelity Extended vs. Fidelity Total Market |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |