Correlation Between Firsthand Alternative and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Fidelity Advisor 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 Firsthand Alternative and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Alternative Energy and Fidelity Advisor Energy, you can compare the effects of market volatilities on Firsthand Alternative and Fidelity Advisor 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 Firsthand Alternative with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Fidelity Advisor.
Diversification Opportunities for Firsthand Alternative and Fidelity Advisor
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Firsthand and Fidelity is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Fidelity Advisor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Energy and Firsthand Alternative 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 Firsthand Alternative Energy are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Energy has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Fidelity Advisor
Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Fidelity Advisor. In addition to that, Firsthand Alternative is 1.39 times more volatile than Fidelity Advisor Energy. It trades about -0.03 of its total potential returns per unit of risk. Fidelity Advisor Energy is currently generating about 0.33 per unit of volatility. If you would invest 4,817 in Fidelity Advisor Energy on August 27, 2024 and sell it today you would earn a total of 371.00 from holding Fidelity Advisor Energy or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Fidelity Advisor Energy
Performance |
| Timeline |
| Firsthand Alternative |
| Fidelity Advisor Energy |
Firsthand Alternative and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Fidelity Advisor
The main advantage of trading using opposite Firsthand Alternative and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Fidelity Advisor 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 Advisor will offset losses from the drop in Fidelity Advisor's long position.| Firsthand Alternative vs. Guinness Atkinson Alternative | Firsthand Alternative vs. Calvert Global Energy | Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha |
| Fidelity Advisor vs. Technology Ultrasector Profund | Fidelity Advisor vs. Red Oak Technology | Fidelity Advisor vs. Hennessy Technology Fund | Fidelity Advisor vs. Global Technology Portfolio |
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.
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