Correlation Between Fidelity Advisor and Fidelity Salem
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Fidelity Salem 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 Salem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Equity and Fidelity Salem Street, you can compare the effects of market volatilities on Fidelity Advisor and Fidelity Salem 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 Salem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Fidelity Salem.
Diversification Opportunities for Fidelity Advisor and Fidelity Salem
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Fidelity is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Equity and Fidelity Salem Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Salem Street 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 Equity are associated (or correlated) with Fidelity Salem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Salem Street has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Fidelity Salem go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Fidelity Salem
Assuming the 90 days horizon Fidelity Advisor Equity is expected to under-perform the Fidelity Salem. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Advisor Equity is 1.45 times less risky than Fidelity Salem. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Fidelity Salem Street is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,285 in Fidelity Salem Street on September 12, 2024 and sell it today you would earn a total of 28.00 from holding Fidelity Salem Street or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Advisor Equity vs. Fidelity Salem Street
Performance |
| Timeline |
| Fidelity Advisor Equity |
| Fidelity Salem Street |
Fidelity Advisor and Fidelity Salem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Fidelity Salem
The main advantage of trading using opposite Fidelity Advisor and Fidelity Salem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Fidelity Salem 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 Salem will offset losses from the drop in Fidelity Salem's long position.| Fidelity Advisor vs. Transamerica Financial Life | Fidelity Advisor vs. Mesirow Financial Small | Fidelity Advisor vs. Angel Oak Financial | Fidelity Advisor vs. Fidelity Advisor Financial |
| Fidelity Salem vs. Lord Abbett Affiliated | Fidelity Salem vs. M Large Cap | Fidelity Salem vs. Aqr Large Cap | Fidelity Salem vs. American Mutual 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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