Correlation Between Fidelity Global and Fidelity Momentum

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

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

Diversification Opportunities for Fidelity Global and Fidelity Momentum

-0.94

Correlation Coefficient

Fidelity Global  Fidelity Momentum

Pay attention - limited upside

The 3 months correlation between Fidelity and Fidelity is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Global Value and Fidelity Momentum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Momentum ETF and Fidelity Global 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 Global Value are associated (or correlated) with Fidelity Momentum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Momentum ETF has no effect on the direction of Fidelity Global i.e., Fidelity Global and Fidelity Momentum go up and down completely randomly.

Pair Corralation between Fidelity Global and Fidelity Momentum

Assuming the 90 days trading horizon Fidelity Global Value is expected to under-perform the Fidelity Momentum. In addition to that, Fidelity Global is 1.01 times more volatile than Fidelity Momentum ETF. It trades about -0.2 of its total potential returns per unit of risk. Fidelity Momentum ETF is currently generating about 0.32 per unit of volatility. If you would invest  1,422  in Fidelity Momentum ETF on April 20, 2025 and sell it today you would earn a total of  392.00  from holding Fidelity Momentum ETF or generate 27.57% return on investment over 90 days.

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

Fidelity Global Value  vs.  Fidelity Momentum ETF

Fidelity Global Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Global Value has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's technical and fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Fidelity Momentum ETF

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Momentum ETF are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Fidelity Momentum exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity Global and Fidelity Momentum

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

The idea behind Fidelity Global Value and Fidelity Momentum ETF 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.