Correlation Between IShares Core and Fidelity Greater

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

By analyzing existing cross correlation between iShares Core SP and Fidelity Greater Canada, you can compare the effects of market volatilities on IShares Core and Fidelity Greater 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 Greater. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Fidelity Greater.

Diversification Opportunities for IShares Core and Fidelity Greater

0.97

Correlation Coefficient

IShares Core  Fidelity Greater

Almost no diversification

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

Pair Corralation between IShares Core and Fidelity Greater

Assuming the 90 days trading horizon iShares Core SP is expected to generate 0.78 times more return on investment than Fidelity Greater. However, iShares Core SP is 1.29 times less risky than Fidelity Greater. It trades about 0.39 of its potential returns per unit of risk. Fidelity Greater Canada is currently generating about 0.28 per unit of risk. If you would invest  5,329  in iShares Core SP on April 20, 2025 and sell it today you would earn a total of  1,144  from holding iShares Core SP or generate 21.47% 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 SP  vs.  Fidelity Greater Canada

iShares Core SP

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core SP are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, IShares Core displayed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Greater Canada

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Greater Canada are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Fidelity Greater exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Core and Fidelity Greater

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

The idea behind iShares Core SP and Fidelity Greater Canada 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.