Correlation Between Fidelity Overseas and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Fidelity Overseas and ProShares UltraShort 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 Overseas and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Overseas Fund and ProShares UltraShort SP500, you can compare the effects of market volatilities on Fidelity Overseas and ProShares UltraShort 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 Overseas with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Overseas and ProShares UltraShort.
Diversification Opportunities for Fidelity Overseas and ProShares UltraShort
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fidelity and ProShares is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Overseas Fund and ProShares UltraShort SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and Fidelity Overseas 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 Overseas Fund are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of Fidelity Overseas i.e., Fidelity Overseas and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Fidelity Overseas and ProShares UltraShort
Assuming the 90 days horizon Fidelity Overseas Fund is expected to under-perform the ProShares UltraShort. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Overseas Fund is 1.98 times less risky than ProShares UltraShort. The mutual fund trades about -0.19 of its potential returns per unit of risk. The ProShares UltraShort SP500 is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,512 in ProShares UltraShort SP500 on January 25, 2024 and sell it today you would earn a total of 166.00 from holding ProShares UltraShort SP500 or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Overseas Fund vs. ProShares UltraShort SP500
Performance |
| Timeline |
| Fidelity Overseas |
| ProShares UltraShort |
Fidelity Overseas and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Overseas and ProShares UltraShort
The main advantage of trading using opposite Fidelity Overseas and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Overseas position performs unexpectedly, ProShares UltraShort 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 ProShares UltraShort will offset losses from the drop in ProShares UltraShort's long position.| Fidelity Overseas vs. Fidelity Freedom 2015 | Fidelity Overseas vs. Fidelity Puritan Fund | Fidelity Overseas vs. Fidelity Puritan Fund | Fidelity Overseas vs. Fidelity Pennsylvania Municipal |
Check out your portfolio center.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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