Correlation Between Touchstone International and Fidelity Sai

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

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

Diversification Opportunities for Touchstone International and Fidelity Sai

-0.79

Correlation Coefficient

Touchstone International  Fidelity Sai

Pay attention - limited upside

The 3 months correlation between Touchstone and Fidelity is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone International Equit and Fidelity Sai Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Convertible and Touchstone International 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 Touchstone International Equity 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 Convertible has no effect on the direction of Touchstone International i.e., Touchstone International and Fidelity Sai go up and down completely randomly.

Pair Corralation between Touchstone International and Fidelity Sai

Assuming the 90 days horizon Touchstone International is expected to generate 1.1 times less return on investment than Fidelity Sai. In addition to that, Touchstone International is 6.13 times more volatile than Fidelity Sai Convertible. It trades about 0.04 of its total potential returns per unit of risk. Fidelity Sai Convertible is currently generating about 0.29 per unit of volatility. If you would invest  983.00  in Fidelity Sai Convertible on September 19, 2024 and sell it today you would earn a total of  119.00  from holding Fidelity Sai Convertible or generate 12.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.66%
Values	Daily Returns

Touchstone International Equit  vs.  Fidelity Sai Convertible

Touchstone International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Fidelity Sai Convertible

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sai Convertible are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. 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 Touchstone International and Fidelity Sai

The main advantage of trading using opposite Touchstone International and Fidelity Sai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone International 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 Touchstone International Equity and Fidelity Sai Convertible 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.