Correlation Between Fidelity Core and Fidelity Greater

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

By analyzing existing cross correlation between Fidelity Core Bond and Fidelity Greater Canada, you can compare the effects of market volatilities on Fidelity Core and Fidelity Greater 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 Core with a short position of Fidelity Greater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Core and Fidelity Greater.

Diversification Opportunities for Fidelity Core and Fidelity Greater

0.35

Correlation Coefficient

Fidelity Core  Fidelity Greater

Weak diversification

The 3 months correlation between Fidelity and Fidelity is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Core Bond and Fidelity Greater Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Greater Canada and Fidelity Core 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 Core Bond are associated (or correlated) with Fidelity Greater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Greater Canada has no effect on the direction of Fidelity Core i.e., Fidelity Core and Fidelity Greater go up and down completely randomly.

Pair Corralation between Fidelity Core and Fidelity Greater

Assuming the 90 days trading horizon Fidelity Core is expected to generate 11.07 times less return on investment than Fidelity Greater. But when comparing it to its historical volatility, Fidelity Core Bond is 4.29 times less risky than Fidelity Greater. It trades about 0.07 of its potential returns per unit of risk. Fidelity Greater Canada is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,131  in Fidelity Greater Canada on April 15, 2025 and sell it today you would earn a total of  155.00  from holding Fidelity Greater Canada or generate 13.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Fidelity Core Bond  vs.  Fidelity Greater Canada

Fidelity Core Bond

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Core Bond are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Fidelity Core is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Fidelity Greater Canada

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Greater Canada are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Fidelity Greater exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity Core and Fidelity Greater

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

The idea behind Fidelity Core Bond and Fidelity Greater Canada 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.