Correlation Between Angel Oak and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Angel Oak 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 Angel Oak and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angel Oak Ultrashort and Fidelity Advisor Freedom, you can compare the effects of market volatilities on Angel Oak 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 Angel Oak with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Fidelity Advisor.
Diversification Opportunities for Angel Oak and Fidelity Advisor
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Angel and Fidelity is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Ultrashort and Fidelity Advisor Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Freedom and Angel Oak 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 Angel Oak Ultrashort 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 Freedom has no effect on the direction of Angel Oak i.e., Angel Oak and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Angel Oak and Fidelity Advisor
Assuming the 90 days horizon Angel Oak is expected to generate 28.88 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Angel Oak Ultrashort is 26.25 times less risky than Fidelity Advisor. It trades about 0.22 of its potential returns per unit of risk. Fidelity Advisor Freedom is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,386 in Fidelity Advisor Freedom on September 4, 2024 and sell it today you would earn a total of 43.00 from holding Fidelity Advisor Freedom or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Angel Oak Ultrashort vs. Fidelity Advisor Freedom
Performance |
| Timeline |
| Angel Oak Ultrashort |
| Fidelity Advisor Freedom |
Angel Oak and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Fidelity Advisor
The main advantage of trading using opposite Angel Oak and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak 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.| Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Angel Oak Multi Strategy | Angel Oak vs. Doubleline Income Solutions | Angel Oak vs. Angel Oak Ultrashort |
| Fidelity Advisor vs. Fidelity Freedom 2015 | Fidelity Advisor vs. Fidelity Puritan Fund | Fidelity Advisor vs. Fidelity Puritan Fund | Fidelity Advisor vs. Fidelity Pennsylvania Municipal |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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