Correlation Between Absolute Convertible and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible 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 Absolute Convertible and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Fidelity Advisor Overseas, you can compare the effects of market volatilities on Absolute Convertible 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 Absolute Convertible with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Fidelity Advisor.
Diversification Opportunities for Absolute Convertible and Fidelity Advisor
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Absolute and Fidelity is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Fidelity Advisor Overseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Overseas and Absolute Convertible 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 Absolute Convertible Arbitrage 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 Overseas has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Absolute Convertible and Fidelity Advisor
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.13 times more return on investment than Fidelity Advisor. However, Absolute Convertible Arbitrage is 7.46 times less risky than Fidelity Advisor. It trades about 0.15 of its potential returns per unit of risk. Fidelity Advisor Overseas is currently generating about 0.02 per unit of risk. If you would invest 1,098 in Absolute Convertible Arbitrage on October 26, 2024 and sell it today you would earn a total of 26.00 from holding Absolute Convertible Arbitrage or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Fidelity Advisor Overseas
Performance |
| Timeline |
| Absolute Convertible |
| Fidelity Advisor Overseas |
Absolute Convertible and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Fidelity Advisor
The main advantage of trading using opposite Absolute Convertible and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible 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.| Absolute Convertible vs. Aqr Long Short Equity | Absolute Convertible vs. Small Cap Equity | Absolute Convertible vs. Quantitative Longshort Equity | Absolute Convertible vs. Gmo Global Equity |
| Fidelity Advisor vs. Columbia Convertible Securities | Fidelity Advisor vs. Absolute Convertible Arbitrage | Fidelity Advisor vs. Virtus Convertible | Fidelity Advisor vs. Allianzgi Convertible Income |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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