Correlation Between Maingate Mlp and Fidelity Emerging

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

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

Diversification Opportunities for Maingate Mlp and Fidelity Emerging

0.21

Correlation Coefficient

Maingate Mlp  Fidelity Emerging

Modest diversification

The 3 months correlation between Maingate and Fidelity is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Maingate Mlp Fund and Fidelity Emerging Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Emerging Asia and Maingate Mlp 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 Maingate Mlp Fund are associated (or correlated) with Fidelity Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Emerging Asia has no effect on the direction of Maingate Mlp i.e., Maingate Mlp and Fidelity Emerging go up and down completely randomly.

Pair Corralation between Maingate Mlp and Fidelity Emerging

Assuming the 90 days horizon Maingate Mlp is expected to generate 1.45 times less return on investment than Fidelity Emerging. But when comparing it to its historical volatility, Maingate Mlp Fund is 1.32 times less risky than Fidelity Emerging. It trades about 0.15 of its potential returns per unit of risk. Fidelity Emerging Asia is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  4,477  in Fidelity Emerging Asia on September 17, 2024 and sell it today you would earn a total of  602.00  from holding Fidelity Emerging Asia or generate 13.45% return on investment over 90 days.

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

Maingate Mlp Fund  vs.  Fidelity Emerging Asia

Maingate Mlp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maingate Mlp Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Maingate Mlp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity Emerging Asia

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Emerging Asia are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Emerging showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maingate Mlp and Fidelity Emerging

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

The idea behind Maingate Mlp Fund and Fidelity Emerging Asia 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.