Correlation Between Multi Units and Fidelity Quality

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

By analyzing existing cross correlation between Multi Units Luxembourg and Fidelity Quality Income, you can compare the effects of market volatilities on Multi Units and Fidelity Quality 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 Multi Units with a short position of Fidelity Quality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Units and Fidelity Quality.

Diversification Opportunities for Multi Units and Fidelity Quality

0.91

Correlation Coefficient

Multi Units  Fidelity Quality

Almost no diversification

The 3 months correlation between Multi and Fidelity is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units Luxembourg and Fidelity Quality Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Quality Income and Multi Units 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 Multi Units Luxembourg are associated (or correlated) with Fidelity Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Quality Income has no effect on the direction of Multi Units i.e., Multi Units and Fidelity Quality go up and down completely randomly.

Pair Corralation between Multi Units and Fidelity Quality

Assuming the 90 days trading horizon Multi Units is expected to generate 10.56 times less return on investment than Fidelity Quality. But when comparing it to its historical volatility, Multi Units Luxembourg is 27.7 times less risky than Fidelity Quality. It trades about 0.68 of its potential returns per unit of risk. Fidelity Quality Income is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  89,475  in Fidelity Quality Income on April 23, 2025 and sell it today you would earn a total of  11,925  from holding Fidelity Quality Income or generate 13.33% return on investment over 90 days.

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

Multi Units Luxembourg  vs.  Fidelity Quality Income

Multi Units Luxembourg

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Units Luxembourg are ranked lower than 53 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Multi Units is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Fidelity Quality Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Quality Income are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fidelity Quality unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Multi Units and Fidelity Quality

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

The idea behind Multi Units Luxembourg and Fidelity Quality Income 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.