Correlation Between Fidelity Total and Fidelity Global

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

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

Diversification Opportunities for Fidelity Total and Fidelity Global

0.44

Correlation Coefficient

Fidelity Total  Fidelity Global

Very weak 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 Total International and Fidelity Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Equity and Fidelity Total 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 Total International are associated (or correlated) with Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Equity has no effect on the direction of Fidelity Total i.e., Fidelity Total and Fidelity Global go up and down completely randomly.

Pair Corralation between Fidelity Total and Fidelity Global

Assuming the 90 days horizon Fidelity Total is expected to generate 2.35 times less return on investment than Fidelity Global. In addition to that, Fidelity Total is 1.48 times more volatile than Fidelity Global Equity. It trades about 0.04 of its total potential returns per unit of risk. Fidelity Global Equity is currently generating about 0.13 per unit of volatility. If you would invest  2,026  in Fidelity Global Equity on September 5, 2024 and sell it today you would earn a total of  95.00  from holding Fidelity Global Equity or generate 4.69% return on investment over 90 days.

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

Fidelity Total International  vs.  Fidelity Global Equity

Fidelity Total Inter

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Total International are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Fidelity Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Global Equity

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Global Equity are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Fidelity Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Total and Fidelity Global

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

The idea behind Fidelity Total International and Fidelity Global Equity 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.