Correlation Between Fidelity Advisor and Fidelity Flex
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Fidelity Flex 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 Fidelity Advisor and Fidelity Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Freedom and Fidelity Flex Freedom, you can compare the effects of market volatilities on Fidelity Advisor and Fidelity Flex 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 Fidelity Advisor with a short position of Fidelity Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Fidelity Flex.
Diversification Opportunities for Fidelity Advisor and Fidelity Flex
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and Fidelity is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Freedom and Fidelity Flex Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Flex Freedom and Fidelity Advisor 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 Fidelity Advisor Freedom are associated (or correlated) with Fidelity Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Flex Freedom has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Fidelity Flex go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Fidelity Flex
Assuming the 90 days horizon Fidelity Advisor Freedom is expected to under-perform the Fidelity Flex. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Advisor Freedom is 2.21 times less risky than Fidelity Flex. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Fidelity Flex Freedom is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,342 in Fidelity Flex Freedom on August 26, 2024 and sell it today you would earn a total of 15.00 from holding Fidelity Flex Freedom or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Freedom vs. Fidelity Flex Freedom
Performance |
| Timeline |
| Fidelity Advisor Freedom |
| Fidelity Flex Freedom |
Fidelity Advisor and Fidelity Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Fidelity Flex
The main advantage of trading using opposite Fidelity Advisor and Fidelity Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Fidelity Flex 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 Flex will offset losses from the drop in Fidelity Flex's long position.| Fidelity Advisor vs. Fidelity Freedom 2015 | Fidelity Advisor vs. Fidelity Puritan Fund | Fidelity Advisor vs. Fidelity Puritan Fund | Fidelity Advisor vs. Fidelity Pennsylvania Municipal |
| Fidelity Flex vs. Rbc Microcap Value | Fidelity Flex vs. Arrow Managed Futures | Fidelity Flex vs. Materials Portfolio Fidelity | Fidelity Flex vs. Scharf Global Opportunity |
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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