Correlation Between CI Gold and Fidelity Tactical

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

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

Diversification Opportunities for CI Gold and Fidelity Tactical

0.37

Correlation Coefficient

CI Gold  Fidelity Tactical

Weak diversification

The 3 months correlation between VALT-B and Fidelity is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CI Gold Bullion and Fidelity Tactical High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Tactical High and CI Gold 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 CI Gold Bullion are associated (or correlated) with Fidelity Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Tactical High has no effect on the direction of CI Gold i.e., CI Gold and Fidelity Tactical go up and down completely randomly.

Pair Corralation between CI Gold and Fidelity Tactical

Assuming the 90 days trading horizon CI Gold Bullion is expected to generate 1.28 times more return on investment than Fidelity Tactical. However, CI Gold is 1.28 times more volatile than Fidelity Tactical High. It trades about 0.13 of its potential returns per unit of risk. Fidelity Tactical High is currently generating about 0.08 per unit of risk. If you would invest  2,573  in CI Gold Bullion on October 4, 2024 and sell it today you would earn a total of  1,177  from holding CI Gold Bullion or generate 45.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	41.51%
Values	Daily Returns

CI Gold Bullion  vs.  Fidelity Tactical High

CI Gold Bullion

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CI Gold Bullion are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong essential indicators, CI Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Tactical High

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Tactical High are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Fidelity Tactical is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CI Gold and Fidelity Tactical

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

The idea behind CI Gold Bullion and Fidelity Tactical High 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.