Correlation Between Pace International and Fidelity Series

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

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

Diversification Opportunities for Pace International and Fidelity Series

0.99

Correlation Coefficient

Pace International  Fidelity Series

No risk reduction

The 3 months correlation between Pace and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging and Fidelity Series Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Emerging and Pace International 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 Pace International Emerging are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Emerging has no effect on the direction of Pace International i.e., Pace International and Fidelity Series go up and down completely randomly.

Pair Corralation between Pace International and Fidelity Series

Assuming the 90 days horizon Pace International is expected to generate 1.03 times less return on investment than Fidelity Series. But when comparing it to its historical volatility, Pace International Emerging is 1.09 times less risky than Fidelity Series. It trades about 0.22 of its potential returns per unit of risk. Fidelity Series Emerging is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  944.00  in Fidelity Series Emerging on May 5, 2025 and sell it today you would earn a total of  93.00  from holding Fidelity Series Emerging or generate 9.85% return on investment over 90 days.

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

Pace International Emerging  vs.  Fidelity Series Emerging

Pace International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pace International Emerging are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Pace International may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Fidelity Series Emerging

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Series Emerging are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Fidelity Series may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Pace International and Fidelity Series

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

The idea behind Pace International Emerging and Fidelity Series Emerging 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.