Correlation Between IShares Core and Fidelity Global

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

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

Diversification Opportunities for IShares Core and Fidelity Global

0.96

Correlation Coefficient

IShares Core  Fidelity Global

Almost no diversification

The 3 months correlation between IShares and Fidelity is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Balanced and Fidelity Global Monthly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Monthly and IShares 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 iShares Core Balanced are associated (or correlated) with Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Monthly has no effect on the direction of IShares Core i.e., IShares Core and Fidelity Global go up and down completely randomly.

Pair Corralation between IShares Core and Fidelity Global

Assuming the 90 days trading horizon iShares Core Balanced is expected to generate 1.2 times more return on investment than Fidelity Global. However, IShares Core is 1.2 times more volatile than Fidelity Global Monthly. It trades about 0.29 of its potential returns per unit of risk. Fidelity Global Monthly is currently generating about 0.32 per unit of risk. If you would invest  2,905  in iShares Core Balanced on April 23, 2025 and sell it today you would earn a total of  218.00  from holding iShares Core Balanced or generate 7.5% return on investment over 90 days.

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

iShares Core Balanced  vs.  Fidelity Global Monthly

iShares Core Balanced

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core Balanced are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, IShares Core may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Fidelity Global Monthly

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Global Monthly are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fidelity Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with IShares Core and Fidelity Global

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

The idea behind iShares Core Balanced and Fidelity Global Monthly 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.