Correlation Between American States and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both American States 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 American States and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American States Water and Fidelity Advisor Utilities, you can compare the effects of market volatilities on American States 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 American States with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of American States and Fidelity Advisor.
Diversification Opportunities for American States and Fidelity Advisor
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Fidelity is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding American States Water 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 American States 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 American States Water 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 American States i.e., American States and Fidelity Advisor go up and down completely randomly.
Pair Corralation between American States and Fidelity Advisor
Considering the 90-day investment horizon American States Water is expected to generate 1.21 times more return on investment than Fidelity Advisor. However, American States is 1.21 times more volatile than Fidelity Advisor Utilities. It trades about 0.12 of its potential returns per unit of risk. Fidelity Advisor Utilities is currently generating about 0.12 per unit of risk. If you would invest 7,215 in American States Water on September 3, 2024 and sell it today you would earn a total of 1,362 from holding American States Water or generate 18.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American States Water vs. Fidelity Advisor Utilities
Performance |
| Timeline |
| American States Water |
| Fidelity Advisor Uti |
American States and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American States and Fidelity Advisor
The main advantage of trading using opposite American States and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American States 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.| American States vs. Middlesex Water | American States vs. SJW Group Common | American States vs. The York Water | American States vs. Artesian Resources |
| Fidelity Advisor vs. Franklin Utilities Fund | Fidelity Advisor vs. Franklin Utilities Fund | Fidelity Advisor vs. Franklin Utilities | Fidelity Advisor vs. Franklin Utilities Fund |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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