Correlation Between College Retirement and Fidelity International
Can any of the company-specific risk be diversified away by investing in both College Retirement 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 College Retirement and Fidelity International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between College Retirement Equities and Fidelity International Discovery, you can compare the effects of market volatilities on College Retirement 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 College Retirement with a short position of Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of College Retirement and Fidelity International.
Diversification Opportunities for College Retirement and Fidelity International
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between College and Fidelity is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding College Retirement Equities and Fidelity International Discove in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and College Retirement 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 College Retirement Equities 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 College Retirement i.e., College Retirement and Fidelity International go up and down completely randomly.
Pair Corralation between College Retirement and Fidelity International
Assuming the 90 days trading horizon College Retirement Equities is expected to under-perform the Fidelity International. But the fund apears to be less risky and, when comparing its historical volatility, College Retirement Equities is 1.0 times less risky than Fidelity International. The fund trades about -0.08 of its potential returns per unit of risk. The Fidelity International Discovery is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,762 in Fidelity International Discovery on December 30, 2024 and sell it today you would earn a total of 241.00 from holding Fidelity International Discovery or generate 5.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
College Retirement Equities vs. Fidelity International Discove
Performance |
Timeline |
College Retirement |
Fidelity International |
College Retirement and Fidelity International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with College Retirement and Fidelity International
The main advantage of trading using opposite College Retirement and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if College Retirement 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.College Retirement vs. Ab Global Risk | College Retirement vs. T Rowe Price | College Retirement vs. Barings Global Floating | College Retirement vs. Franklin Mutual Global |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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