Correlation Between Fidelity International and BMO Equal
Can any of the company-specific risk be diversified away by investing in both Fidelity International and BMO Equal 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 BMO Equal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity International High and BMO Equal Weight, you can compare the effects of market volatilities on Fidelity International and BMO Equal 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 BMO Equal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and BMO Equal.
Diversification Opportunities for Fidelity International and BMO Equal
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and BMO is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International High and BMO Equal Weight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Equal Weight 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 High are associated (or correlated) with BMO Equal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Equal Weight has no effect on the direction of Fidelity International i.e., Fidelity International and BMO Equal go up and down completely randomly.
Pair Corralation between Fidelity International and BMO Equal
Assuming the 90 days trading horizon Fidelity International is expected to generate 2.02 times less return on investment than BMO Equal. But when comparing it to its historical volatility, Fidelity International High is 1.35 times less risky than BMO Equal. It trades about 0.11 of its potential returns per unit of risk. BMO Equal Weight is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,388 in BMO Equal Weight on September 13, 2025 and sell it today you would earn a total of 644.00 from holding BMO Equal Weight or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International High vs. BMO Equal Weight
Performance |
| Timeline |
| Fidelity International |
| BMO Equal Weight |
Fidelity International and BMO Equal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and BMO Equal
The main advantage of trading using opposite Fidelity International and BMO Equal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, BMO Equal 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 BMO Equal will offset losses from the drop in BMO Equal's long position.| Fidelity International vs. Brompton European Dividend | Fidelity International vs. Mackenzie International Equity | Fidelity International vs. RBC Quant European | Fidelity International vs. iShares MSCI USA |
| BMO Equal vs. Global X Canadian | BMO Equal vs. Invesco RAFI Canadian | BMO Equal vs. Global X Uranium | BMO Equal vs. BMO MSCI USA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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