Correlation Between Fidelity High and Fidelity Canadian

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

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

Diversification Opportunities for Fidelity High and Fidelity Canadian

0.89

Correlation Coefficient

Fidelity High  Fidelity Canadian

Very poor diversification

The 3 months correlation between Fidelity and Fidelity is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity High Dividend and Fidelity Canadian Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canadian Value and Fidelity High 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 High Dividend are associated (or correlated) with Fidelity Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canadian Value has no effect on the direction of Fidelity High i.e., Fidelity High and Fidelity Canadian go up and down completely randomly.

Pair Corralation between Fidelity High and Fidelity Canadian

Assuming the 90 days trading horizon Fidelity High is expected to generate 1.1 times less return on investment than Fidelity Canadian. In addition to that, Fidelity High is 2.0 times more volatile than Fidelity Canadian Value. It trades about 0.2 of its total potential returns per unit of risk. Fidelity Canadian Value is currently generating about 0.44 per unit of volatility. If you would invest  1,481  in Fidelity Canadian Value on April 24, 2025 and sell it today you would earn a total of  167.00  from holding Fidelity Canadian Value or generate 11.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Fidelity High Dividend  vs.  Fidelity Canadian Value

Fidelity High Dividend

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity High Dividend are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fidelity High may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Fidelity Canadian Value

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Canadian Value are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fidelity Canadian may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Fidelity High and Fidelity Canadian

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

The idea behind Fidelity High Dividend and Fidelity Canadian Value 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.