Correlation Between Icon Information and Fidelity Series

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

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

Diversification Opportunities for Icon Information and Fidelity Series

-0.59

Correlation Coefficient

Icon Information  Fidelity Series

Excellent diversification

The 3 months correlation between Icon and Fidelity is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology and Fidelity Series International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Inte and Icon Information 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 Icon Information Technology are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Inte has no effect on the direction of Icon Information i.e., Icon Information and Fidelity Series go up and down completely randomly.

Pair Corralation between Icon Information and Fidelity Series

Assuming the 90 days horizon Icon Information Technology is expected to under-perform the Fidelity Series. In addition to that, Icon Information is 1.33 times more volatile than Fidelity Series International. It trades about -0.12 of its total potential returns per unit of risk. Fidelity Series International is currently generating about 0.31 per unit of volatility. If you would invest  1,185  in Fidelity Series International on December 20, 2024 and sell it today you would earn a total of  213.00  from holding Fidelity Series International or generate 17.97% return on investment over 90 days.

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

Icon Information Technology  vs.  Fidelity Series International

Icon Information Tec

Risk-Adjusted Performance

Very Weak

Over the last 90 days Icon Information Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Fidelity Series Inte

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Series International are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Series showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Icon Information and Fidelity Series

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

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