Correlation Between Fidelity All and CI Europe

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

By analyzing existing cross correlation between Fidelity All in One Balanced and CI Europe Hedged, you can compare the effects of market volatilities on Fidelity All and CI Europe 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 All with a short position of CI Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity All and CI Europe.

Diversification Opportunities for Fidelity All and CI Europe

0.8

Correlation Coefficient

Fidelity All  CI Europe

Very poor diversification

The 3 months correlation between Fidelity and EHE is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity All in One Balanced and CI Europe Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Europe Hedged and Fidelity All 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 All in One Balanced are associated (or correlated) with CI Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Europe Hedged has no effect on the direction of Fidelity All i.e., Fidelity All and CI Europe go up and down completely randomly.

Pair Corralation between Fidelity All and CI Europe

Assuming the 90 days trading horizon Fidelity All is expected to generate 1.16 times less return on investment than CI Europe. But when comparing it to its historical volatility, Fidelity All in One Balanced is 2.0 times less risky than CI Europe. It trades about 0.22 of its potential returns per unit of risk. CI Europe Hedged is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3,254  in CI Europe Hedged on April 24, 2025 and sell it today you would earn a total of  204.00  from holding CI Europe Hedged or generate 6.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Fidelity All in One Balanced  vs.  CI Europe Hedged

Fidelity All in

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity All in One Balanced are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Fidelity All is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

CI Europe Hedged

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CI Europe Hedged are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, CI Europe may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Fidelity All and CI Europe

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

The idea behind Fidelity All in One Balanced and CI Europe Hedged 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.