Correlation Between Bank of America and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Bank of America 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 Bank of America and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Fidelity Advisor Equity, you can compare the effects of market volatilities on Bank of America 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 Bank of America with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Fidelity Advisor.
Diversification Opportunities for Bank of America and Fidelity Advisor
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Fidelity is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Fidelity Advisor Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Equity and Bank of America 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 Bank of America 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 Equity has no effect on the direction of Bank of America i.e., Bank of America and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Bank of America and Fidelity Advisor
Considering the 90-day investment horizon Bank of America is expected to generate 1.1 times less return on investment than Fidelity Advisor. In addition to that, Bank of America is 1.57 times more volatile than Fidelity Advisor Equity. It trades about 0.06 of its total potential returns per unit of risk. Fidelity Advisor Equity is currently generating about 0.11 per unit of volatility. If you would invest 1,358 in Fidelity Advisor Equity on September 2, 2024 and sell it today you would earn a total of 894.00 from holding Fidelity Advisor Equity or generate 65.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Fidelity Advisor Equity
Performance |
| Timeline |
| Bank of America |
| Fidelity Advisor Equity |
Bank of America and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Fidelity Advisor
The main advantage of trading using opposite Bank of America and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America 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.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Fidelity Advisor vs. Artisan High Income | Fidelity Advisor vs. Needham Aggressive Growth | Fidelity Advisor vs. Lgm Risk Managed | Fidelity Advisor vs. Metropolitan West High |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |