Correlation Between HDAW and Fidelity International

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

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

Diversification Opportunities for HDAW and Fidelity International

0.0

Correlation Coefficient

HDAW  Fidelity International

Pay attention - limited upside

The 3 months correlation between HDAW and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HDAW and Fidelity International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and HDAW 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 HDAW are associated (or correlated) with Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of HDAW i.e., HDAW and Fidelity International go up and down completely randomly.

Pair Corralation between HDAW and Fidelity International

If you would invest  1,930  in Fidelity International High on December 28, 2024 and sell it today you would earn a total of  241.00  from holding Fidelity International High or generate 12.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

HDAW  vs.  Fidelity International High

HDAW

Risk-Adjusted Performance

Very Weak

Over the last 90 days HDAW has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, HDAW is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Fidelity International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity International High are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Fidelity International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with HDAW and Fidelity International

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

The idea behind HDAW and Fidelity International High 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.