Correlation Between Fidelity Worldwide and Fidelity Equity-income

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

By analyzing existing cross correlation between Fidelity Worldwide Fund and Fidelity Equity Income Fund, you can compare the effects of market volatilities on Fidelity Worldwide and Fidelity Equity-income 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 Worldwide with a short position of Fidelity Equity-income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Worldwide and Fidelity Equity-income.

Diversification Opportunities for Fidelity Worldwide and Fidelity Equity-income

0.9

Correlation Coefficient

Fidelity Worldwide  Fidelity Equity-income

Almost no diversification

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

Pair Corralation between Fidelity Worldwide and Fidelity Equity-income

Assuming the 90 days horizon Fidelity Worldwide Fund is expected to generate 1.23 times more return on investment than Fidelity Equity-income. However, Fidelity Worldwide is 1.23 times more volatile than Fidelity Equity Income Fund. It trades about 0.27 of its potential returns per unit of risk. Fidelity Equity Income Fund is currently generating about 0.15 per unit of risk. If you would invest  3,263  in Fidelity Worldwide Fund on May 4, 2025 and sell it today you would earn a total of  458.00  from holding Fidelity Worldwide Fund or generate 14.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

Fidelity Worldwide Fund  vs.  Fidelity Equity Income Fund

Fidelity Worldwide

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Worldwide Fund are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Fidelity Worldwide showed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Equity Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Equity Income Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Fidelity Equity-income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Worldwide and Fidelity Equity-income

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

The idea behind Fidelity Worldwide Fund and Fidelity Equity Income Fund 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..