Correlation Between Fidelity International and Calvert International

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

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

Diversification Opportunities for Fidelity International and Calvert International

0.86

Correlation Coefficient

Fidelity International  Calvert International

Very poor diversification

The 3 months correlation between Fidelity and Calvert is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Growth and Calvert International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert International and Fidelity 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 Fidelity International Growth are associated (or correlated) with Calvert International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert International has no effect on the direction of Fidelity International i.e., Fidelity International and Calvert International go up and down completely randomly.

Pair Corralation between Fidelity International and Calvert International

Assuming the 90 days horizon Fidelity International Growth is expected to generate 0.97 times more return on investment than Calvert International. However, Fidelity International Growth is 1.03 times less risky than Calvert International. It trades about 0.0 of its potential returns per unit of risk. Calvert International Equity is currently generating about -0.06 per unit of risk. If you would invest  2,086  in Fidelity International Growth on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Fidelity International Growth or generate 0.0% return on investment over 90 days.

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

Fidelity International Growth  vs.  Calvert International Equity

Fidelity International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Calvert International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Fidelity International and Calvert International

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

The idea behind Fidelity International Growth and Calvert International Equity 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..