Correlation Between Fidelity International and Large Cap
Can any of the company-specific risk be diversified away by investing in both Fidelity International and Large Cap 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 Large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity International Index and Large Cap International, you can compare the effects of market volatilities on Fidelity International and Large Cap 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 Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Large Cap.
Diversification Opportunities for Fidelity International and Large Cap
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Large is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Index and Large Cap International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap 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 Index are associated (or correlated) with Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap International has no effect on the direction of Fidelity International i.e., Fidelity International and Large Cap go up and down completely randomly.
Pair Corralation between Fidelity International and Large Cap
Assuming the 90 days horizon Fidelity International is expected to generate 1.3 times less return on investment than Large Cap. In addition to that, Fidelity International is 1.05 times more volatile than Large Cap International. It trades about 0.07 of its total potential returns per unit of risk. Large Cap International is currently generating about 0.1 per unit of volatility. If you would invest 3,169 in Large Cap International on May 30, 2025 and sell it today you would earn a total of 102.00 from holding Large Cap International or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International Index vs. Large Cap International
Performance |
| Timeline |
| Fidelity International |
| Large Cap International |
Fidelity International and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Large Cap
The main advantage of trading using opposite Fidelity International and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap's long position.| Fidelity International vs. Fidelity Emerging Markets | Fidelity International vs. Fidelity Small Cap | Fidelity International vs. Fidelity Bond Index | Fidelity International vs. Fidelity Mid Cap |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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