Correlation Between Schwab Strategic and Fidelity Sai

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

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

Diversification Opportunities for Schwab Strategic and Fidelity Sai

-0.72

Correlation Coefficient

Schwab Strategic  Fidelity Sai

Pay attention - limited upside

The 3 months correlation between Schwab and Fidelity is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Schwab Strategic Trust and Fidelity Sai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Interna and Schwab Strategic 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 Schwab Strategic Trust are associated (or correlated) with Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Interna has no effect on the direction of Schwab Strategic i.e., Schwab Strategic and Fidelity Sai go up and down completely randomly.

Pair Corralation between Schwab Strategic and Fidelity Sai

Given the investment horizon of 90 days Schwab Strategic Trust is expected to generate 5.67 times more return on investment than Fidelity Sai. However, Schwab Strategic is 5.67 times more volatile than Fidelity Sai International. It trades about 0.21 of its potential returns per unit of risk. Fidelity Sai International is currently generating about -0.04 per unit of risk. If you would invest  3,218  in Schwab Strategic Trust on September 12, 2024 and sell it today you would earn a total of  2,191  from holding Schwab Strategic Trust or generate 68.09% return on investment over 90 days.

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

Schwab Strategic Trust  vs.  Fidelity Sai International

Schwab Strategic Trust

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Schwab Strategic Trust are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Schwab Strategic exhibited solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Sai Interna

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Schwab Strategic and Fidelity Sai

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

The idea behind Schwab Strategic Trust and Fidelity Sai 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.