Correlation Between Fidelity MSCI and ARK Autonomous

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

By analyzing existing cross correlation between Fidelity MSCI Information and ARK Autonomous Technology, you can compare the effects of market volatilities on Fidelity MSCI and ARK Autonomous 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 MSCI with a short position of ARK Autonomous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity MSCI and ARK Autonomous.

Diversification Opportunities for Fidelity MSCI and ARK Autonomous

0.88

Correlation Coefficient

Fidelity MSCI  ARK Autonomous

Very poor diversification

The 3 months correlation between Fidelity and ARK is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity MSCI Information and ARK Autonomous Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK Autonomous Technology and Fidelity MSCI 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 MSCI Information are associated (or correlated) with ARK Autonomous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK Autonomous Technology has no effect on the direction of Fidelity MSCI i.e., Fidelity MSCI and ARK Autonomous go up and down completely randomly.

Pair Corralation between Fidelity MSCI and ARK Autonomous

Given the investment horizon of 90 days Fidelity MSCI Information is expected to generate 0.75 times more return on investment than ARK Autonomous. However, Fidelity MSCI Information is 1.34 times less risky than ARK Autonomous. It trades about -0.09 of its potential returns per unit of risk. ARK Autonomous Technology is currently generating about -0.1 per unit of risk. If you would invest  18,648  in Fidelity MSCI Information on December 28, 2024 and sell it today you would lose (1,898) from holding Fidelity MSCI Information or give up 10.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

Fidelity MSCI Information  vs.  ARK Autonomous Technology

Fidelity MSCI Information

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity MSCI Information has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

ARK Autonomous Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days ARK Autonomous Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Etf's forward-looking signals remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Pair Trading with Fidelity MSCI and ARK Autonomous

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

The idea behind Fidelity MSCI Information and ARK Autonomous Technology 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.