Correlation Between Evolve FANGMA and Fidelity International

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

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

Diversification Opportunities for Evolve FANGMA and Fidelity International

0.97

Correlation Coefficient

Evolve FANGMA  Fidelity International

Almost no diversification

The 3 months correlation between Evolve and Fidelity is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Evolve FANGMA Index and Fidelity International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and Evolve FANGMA 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 Evolve FANGMA Index are associated (or correlated) with Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of Evolve FANGMA i.e., Evolve FANGMA and Fidelity International go up and down completely randomly.

Pair Corralation between Evolve FANGMA and Fidelity International

Assuming the 90 days trading horizon Evolve FANGMA Index is expected to generate 1.14 times more return on investment than Fidelity International. However, Evolve FANGMA is 1.14 times more volatile than Fidelity International Value. It trades about 0.33 of its potential returns per unit of risk. Fidelity International Value is currently generating about 0.21 per unit of risk. If you would invest  1,818  in Evolve FANGMA Index on April 21, 2025 and sell it today you would earn a total of  95.00  from holding Evolve FANGMA Index or generate 5.23% return on investment over 90 days.

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

Evolve FANGMA Index  vs.  Fidelity International Value

Evolve FANGMA Index

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve FANGMA Index are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Evolve FANGMA displayed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity International Value are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fidelity International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Evolve FANGMA and Fidelity International

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

The idea behind Evolve FANGMA Index and Fidelity International 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.