Correlation Between 70082LAB3 and Fidelity Pacific

Can any of the company-specific risk be diversified away by investing in both 70082LAB3 and Fidelity Pacific 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 70082LAB3 and Fidelity Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US70082LAB36 and Fidelity Pacific Basin, you can compare the effects of market volatilities on 70082LAB3 and Fidelity Pacific 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 70082LAB3 with a short position of Fidelity Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of 70082LAB3 and Fidelity Pacific.

Diversification Opportunities for 70082LAB3 and Fidelity Pacific

-0.63

Correlation Coefficient

70082LAB3  Fidelity Pacific

Excellent diversification

The 3 months correlation between 70082LAB3 and Fidelity is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding US70082LAB36 and Fidelity Pacific Basin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Pacific Basin and 70082LAB3 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 US70082LAB36 are associated (or correlated) with Fidelity Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Pacific Basin has no effect on the direction of 70082LAB3 i.e., 70082LAB3 and Fidelity Pacific go up and down completely randomly.

Pair Corralation between 70082LAB3 and Fidelity Pacific

Assuming the 90 days trading horizon US70082LAB36 is expected to generate 63.94 times more return on investment than Fidelity Pacific. However, 70082LAB3 is 63.94 times more volatile than Fidelity Pacific Basin. It trades about 0.06 of its potential returns per unit of risk. Fidelity Pacific Basin is currently generating about 0.02 per unit of risk. If you would invest  7,150  in US70082LAB36 on September 28, 2024 and sell it today you would earn a total of  1,850  from holding US70082LAB36 or generate 25.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	45.05%
Values	Daily Returns

US70082LAB36  vs.  Fidelity Pacific Basin

US70082LAB36

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in US70082LAB36 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, 70082LAB3 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity Pacific Basin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Pacific Basin has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with 70082LAB3 and Fidelity Pacific

The main advantage of trading using opposite 70082LAB3 and Fidelity Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 70082LAB3 position performs unexpectedly, Fidelity Pacific 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 Pacific will offset losses from the drop in Fidelity Pacific's long position.

The idea behind US70082LAB36 and Fidelity Pacific Basin 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.