Correlation Between Fidelity Advisor and Fidelity Contrafund
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Fidelity Contrafund 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 Contrafund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Growth and Fidelity Contrafund K6, you can compare the effects of market volatilities on Fidelity Advisor and Fidelity Contrafund 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 Contrafund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Fidelity Contrafund.
Diversification Opportunities for Fidelity Advisor and Fidelity Contrafund
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Fidelity and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Growth and Fidelity Contrafund K6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Contrafund 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 Growth are associated (or correlated) with Fidelity Contrafund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Contrafund has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Fidelity Contrafund go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Fidelity Contrafund
Assuming the 90 days horizon Fidelity Advisor Growth is expected to generate 1.15 times more return on investment than Fidelity Contrafund. However, Fidelity Advisor is 1.15 times more volatile than Fidelity Contrafund K6. It trades about 0.28 of its potential returns per unit of risk. Fidelity Contrafund K6 is currently generating about 0.26 per unit of risk. If you would invest 13,356 in Fidelity Advisor Growth on September 1, 2024 and sell it today you would earn a total of 822.00 from holding Fidelity Advisor Growth or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Growth vs. Fidelity Contrafund K6
Performance |
| Timeline |
| Fidelity Advisor Growth |
| Fidelity Contrafund |
Fidelity Advisor and Fidelity Contrafund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Fidelity Contrafund
The main advantage of trading using opposite Fidelity Advisor and Fidelity Contrafund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Fidelity Contrafund 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 Contrafund will offset losses from the drop in Fidelity Contrafund's long position.| Fidelity Advisor vs. John Hancock Investment | Fidelity Advisor vs. Transamerica Large Cap | Fidelity Advisor vs. Fundamental Large Cap | Fidelity Advisor vs. Qs Large Cap |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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