Correlation Between Stone Ridge and Fidelity Emerging

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

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

Diversification Opportunities for Stone Ridge and Fidelity Emerging

0.0

Correlation Coefficient

Stone Ridge  Fidelity Emerging

Pay attention - limited upside

The 3 months correlation between Stone and FIDELITY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge High 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 Stone Ridge 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 Stone Ridge High 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 Stone Ridge i.e., Stone Ridge and Fidelity Emerging go up and down completely randomly.

Pair Corralation between Stone Ridge and Fidelity Emerging

If you would invest  4,895  in Fidelity Emerging Asia on December 29, 2024 and sell it today you would earn a total of  248.00  from holding Fidelity Emerging Asia or generate 5.07% return on investment over 90 days.

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

Stone Ridge High  vs.  Fidelity Emerging Asia

Stone Ridge High

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stone Ridge High has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Stone Ridge is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Emerging Asia

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Emerging Asia are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stone Ridge and Fidelity Emerging

The main advantage of trading using opposite Stone Ridge and Fidelity Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge 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 Stone Ridge High 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.