Correlation Between Fidelity MSCI and Invesco Dynamic

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

By analyzing existing cross correlation between Fidelity MSCI Industrials and Invesco Dynamic Building, you can compare the effects of market volatilities on Fidelity MSCI and Invesco Dynamic 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 Invesco Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity MSCI and Invesco Dynamic.

Diversification Opportunities for Fidelity MSCI and Invesco Dynamic

0.9

Correlation Coefficient

Fidelity MSCI  Invesco Dynamic

Almost no diversification

The 3 months correlation between Fidelity and Invesco is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity MSCI Industrials and Invesco Dynamic Building in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Dynamic Building 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 Industrials are associated (or correlated) with Invesco Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Dynamic Building has no effect on the direction of Fidelity MSCI i.e., Fidelity MSCI and Invesco Dynamic go up and down completely randomly.

Pair Corralation between Fidelity MSCI and Invesco Dynamic

Given the investment horizon of 90 days Fidelity MSCI is expected to generate 2.35 times less return on investment than Invesco Dynamic. But when comparing it to its historical volatility, Fidelity MSCI Industrials is 1.51 times less risky than Invesco Dynamic. It trades about 0.12 of its potential returns per unit of risk. Invesco Dynamic Building is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  7,930  in Invesco Dynamic Building on May 18, 2025 and sell it today you would earn a total of  1,078  from holding Invesco Dynamic Building or generate 13.59% return on investment over 90 days.

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

Fidelity MSCI Industrials  vs.  Invesco Dynamic Building

Fidelity MSCI Industrials

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity MSCI Industrials are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Fidelity MSCI is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Invesco Dynamic Building

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Dynamic Building are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady forward-looking signals, Invesco Dynamic sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity MSCI and Invesco Dynamic

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

The idea behind Fidelity MSCI Industrials and Invesco Dynamic Building 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.