Correlation Between Fidelity ClearPath and Edgepoint Canadian

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

By analyzing existing cross correlation between Fidelity ClearPath 2045 and Edgepoint Canadian Portfolio, you can compare the effects of market volatilities on Fidelity ClearPath and Edgepoint Canadian 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 ClearPath with a short position of Edgepoint Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity ClearPath and Edgepoint Canadian.

Diversification Opportunities for Fidelity ClearPath and Edgepoint Canadian

0.81

Correlation Coefficient

Fidelity ClearPath  Edgepoint Canadian

Very poor diversification

The 3 months correlation between Fidelity and Edgepoint is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity ClearPath 2045 and Edgepoint Canadian Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgepoint Canadian and Fidelity ClearPath 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 ClearPath 2045 are associated (or correlated) with Edgepoint Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgepoint Canadian has no effect on the direction of Fidelity ClearPath i.e., Fidelity ClearPath and Edgepoint Canadian go up and down completely randomly.

Pair Corralation between Fidelity ClearPath and Edgepoint Canadian

Assuming the 90 days trading horizon Fidelity ClearPath is expected to generate 1.06 times less return on investment than Edgepoint Canadian. In addition to that, Fidelity ClearPath is 1.14 times more volatile than Edgepoint Canadian Portfolio. It trades about 0.39 of its total potential returns per unit of risk. Edgepoint Canadian Portfolio is currently generating about 0.47 per unit of volatility. If you would invest  5,372  in Edgepoint Canadian Portfolio on April 20, 2025 and sell it today you would earn a total of  755.00  from holding Edgepoint Canadian Portfolio or generate 14.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	82.54%
Values	Daily Returns

Fidelity ClearPath 2045  vs.  Edgepoint Canadian Portfolio

Fidelity ClearPath 2045

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity ClearPath 2045 are ranked lower than 30 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat inconsistent basic indicators, Fidelity ClearPath sustained solid returns over the last few months and may actually be approaching a breakup point.

Edgepoint Canadian

Risk-Adjusted Performance

Very Strong

Over the last 90 days Edgepoint Canadian Portfolio has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat sluggish technical and fundamental indicators, Edgepoint Canadian sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity ClearPath and Edgepoint Canadian

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

The idea behind Fidelity ClearPath 2045 and Edgepoint Canadian Portfolio 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.