Correlation Between Avista and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Avista 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 Avista and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avista and Fidelity Advisor Utilities, you can compare the effects of market volatilities on Avista 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 Avista with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avista and Fidelity Advisor.
Diversification Opportunities for Avista and Fidelity Advisor
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Avista and Fidelity is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Avista and Fidelity Advisor Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Uti and Avista 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 Avista 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 Uti has no effect on the direction of Avista i.e., Avista and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Avista and Fidelity Advisor
Considering the 90-day investment horizon Avista is expected to generate 1.3 times more return on investment than Fidelity Advisor. However, Avista is 1.3 times more volatile than Fidelity Advisor Utilities. It trades about 0.01 of its potential returns per unit of risk. Fidelity Advisor Utilities is currently generating about -0.01 per unit of risk. If you would invest 3,659 in Avista on November 4, 2024 and sell it today you would earn a total of 3.00 from holding Avista or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avista vs. Fidelity Advisor Utilities
Performance |
| Timeline |
| Avista |
| Fidelity Advisor Uti |
Avista and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avista and Fidelity Advisor
The main advantage of trading using opposite Avista and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avista 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.| Avista vs. Allete Inc | Avista vs. Black Hills | Avista vs. Montauk Renewables | Avista vs. Companhia Paranaense de |
| Fidelity Advisor vs. Aig Government Money | Fidelity Advisor vs. Federated Government Income | Fidelity Advisor vs. Schwab Government Money | Fidelity Advisor vs. Voya Government Money |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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