Correlation Between First Trust and Fidelity International
Can any of the company-specific risk be diversified away by investing in both First Trust and Fidelity 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 First Trust and Fidelity International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Low and Fidelity International Small, you can compare the effects of market volatilities on First Trust and Fidelity 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 First Trust with a short position of Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Fidelity International.
Diversification Opportunities for First Trust and Fidelity International
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Fidelity is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Low and Fidelity International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and First Trust 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 First Trust Low are associated (or correlated) with Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of First Trust i.e., First Trust and Fidelity International go up and down completely randomly.
Pair Corralation between First Trust and Fidelity International
Given the investment horizon of 90 days First Trust Low is expected to generate 0.18 times more return on investment than Fidelity International. However, First Trust Low is 5.54 times less risky than Fidelity International. It trades about 0.31 of its potential returns per unit of risk. Fidelity International Small is currently generating about -0.08 per unit of risk. If you would invest 4,879 in First Trust Low on August 24, 2025 and sell it today you would earn a total of 114.00 from holding First Trust Low or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Low vs. Fidelity International Small
Performance |
| Timeline |
| First Trust Low |
| Fidelity International |
First Trust and Fidelity International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Fidelity International
The main advantage of trading using opposite First Trust and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Fidelity 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 Fidelity International will offset losses from the drop in Fidelity International's long position.| First Trust vs. Janus Henderson Mortgage Backed | First Trust vs. Fidelity International Small | First Trust vs. Fidelity International Small | First Trust vs. Dimensional ETF Trust |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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