Correlation Between Fidelity Nordic and Fidelity Canada
Can any of the company-specific risk be diversified away by investing in both Fidelity Nordic and Fidelity Canada 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 Fidelity Nordic and Fidelity Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Nordic Fund and Fidelity Canada Fund, you can compare the effects of market volatilities on Fidelity Nordic and Fidelity Canada 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 Fidelity Nordic with a short position of Fidelity Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Nordic and Fidelity Canada.
Diversification Opportunities for Fidelity Nordic and Fidelity Canada
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Nordic Fund and Fidelity Canada Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canada and Fidelity Nordic 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 Fidelity Nordic Fund are associated (or correlated) with Fidelity Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canada has no effect on the direction of Fidelity Nordic i.e., Fidelity Nordic and Fidelity Canada go up and down completely randomly.
Pair Corralation between Fidelity Nordic and Fidelity Canada
Assuming the 90 days horizon Fidelity Nordic Fund is expected to under-perform the Fidelity Canada. In addition to that, Fidelity Nordic is 1.12 times more volatile than Fidelity Canada Fund. It trades about -0.3 of its total potential returns per unit of risk. Fidelity Canada Fund is currently generating about 0.0 per unit of volatility. If you would invest 6,628 in Fidelity Canada Fund on January 24, 2024 and sell it today you would lose (1.00) from holding Fidelity Canada Fund or give up 0.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Nordic Fund vs. Fidelity Canada Fund
Performance |
| Timeline |
| Fidelity Nordic |
| Fidelity Canada |
Fidelity Nordic and Fidelity Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Nordic and Fidelity Canada
The main advantage of trading using opposite Fidelity Nordic and Fidelity Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Nordic position performs unexpectedly, Fidelity Canada 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 Canada will offset losses from the drop in Fidelity Canada's long position.| Fidelity Nordic vs. Fidelity Investment Trust | Fidelity Nordic vs. Fidelity Europe Fund | Fidelity Nordic vs. Fidelity Emerging Asia | Fidelity Nordic vs. Fidelity Latin America |
| Fidelity Canada vs. Fidelity Investment Trust | Fidelity Canada vs. Fidelity Europe Fund | Fidelity Canada vs. Fidelity Emerging Asia | Fidelity Canada vs. Fidelity Latin America |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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