Correlation Between Causeway Emerging and Fidelity Sai

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

By analyzing existing cross correlation between Causeway Emerging Markets and Fidelity Sai Treasury, you can compare the effects of market volatilities on Causeway Emerging and Fidelity Sai 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 Causeway Emerging with a short position of Fidelity Sai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Causeway Emerging and Fidelity Sai.

Diversification Opportunities for Causeway Emerging and Fidelity Sai

0.47

Correlation Coefficient

Causeway Emerging  Fidelity Sai

Very weak diversification

The 3 months correlation between Causeway and Fidelity is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Causeway Emerging Markets and Fidelity Sai Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Treasury and Causeway Emerging 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 Causeway Emerging Markets are associated (or correlated) with Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Treasury has no effect on the direction of Causeway Emerging i.e., Causeway Emerging and Fidelity Sai go up and down completely randomly.

Pair Corralation between Causeway Emerging and Fidelity Sai

Assuming the 90 days horizon Causeway Emerging Markets is expected to generate 2.94 times more return on investment than Fidelity Sai. However, Causeway Emerging is 2.94 times more volatile than Fidelity Sai Treasury. It trades about 0.24 of its potential returns per unit of risk. Fidelity Sai Treasury is currently generating about 0.08 per unit of risk. If you would invest  1,150  in Causeway Emerging Markets on May 5, 2025 and sell it today you would earn a total of  153.00  from holding Causeway Emerging Markets or generate 13.3% return on investment over 90 days.

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

Causeway Emerging Markets  vs.  Fidelity Sai Treasury

Causeway Emerging Markets

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Causeway Emerging Markets are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Causeway Emerging showed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Sai Treasury

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sai Treasury are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Fidelity Sai is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Causeway Emerging and Fidelity Sai

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

The idea behind Causeway Emerging Markets and Fidelity Sai Treasury 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.