Correlation Between Fidelity Value and Global X

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

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

Diversification Opportunities for Fidelity Value and Global X

-0.39

Correlation Coefficient

Fidelity Value  Global X

Very good diversification

The 3 months correlation between Fidelity and Global is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Value Factor and Global X SuperDividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SuperDividend and Fidelity Value 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 Value Factor are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SuperDividend has no effect on the direction of Fidelity Value i.e., Fidelity Value and Global X go up and down completely randomly.

Pair Corralation between Fidelity Value and Global X

Given the investment horizon of 90 days Fidelity Value Factor is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, Fidelity Value Factor is 1.12 times less risky than Global X. The etf trades about -0.2 of its potential returns per unit of risk. The Global X SuperDividend is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  2,124  in Global X SuperDividend on October 5, 2024 and sell it today you would lose (41.00) from holding Global X SuperDividend or give up 1.93% of portfolio value over 90 days.

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

Fidelity Value Factor  vs.  Global X SuperDividend

Fidelity Value Factor

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Value Factor are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Fidelity Value is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Global X SuperDividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X SuperDividend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's forward indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Pair Trading with Fidelity Value and Global X

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

The idea behind Fidelity Value Factor and Global X SuperDividend 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.