Correlation Between Fidelity MSCI and US Global

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

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

Diversification Opportunities for Fidelity MSCI and US Global

-0.21

Correlation Coefficient

Fidelity MSCI  US Global

Very good diversification

The 3 months correlation between Fidelity and SEA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity MSCI Materials and US Global Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Sea and Fidelity MSCI 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 MSCI Materials are associated (or correlated) with US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Sea has no effect on the direction of Fidelity MSCI i.e., Fidelity MSCI and US Global go up and down completely randomly.

Pair Corralation between Fidelity MSCI and US Global

Given the investment horizon of 90 days Fidelity MSCI Materials is expected to under-perform the US Global. But the etf apears to be less risky and, when comparing its historical volatility, Fidelity MSCI Materials is 1.16 times less risky than US Global. The etf trades about -0.13 of its potential returns per unit of risk. The US Global Sea is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  1,533  in US Global Sea on February 4, 2024 and sell it today you would earn a total of  93.00  from holding US Global Sea or generate 6.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Fidelity MSCI Materials  vs.  US Global Sea

Fidelity MSCI Materials

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity MSCI Materials are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fidelity MSCI may actually be approaching a critical reversion point that can send shares even higher in June 2024.

US Global Sea

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in US Global Sea are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, US Global may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Fidelity MSCI and US Global

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

The idea behind Fidelity MSCI Materials and US Global Sea 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.