Correlation Between Fidelity Advisor and Western Assets
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Western Assets 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 Western Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Financial and Western Assets Emerging, you can compare the effects of market volatilities on Fidelity Advisor and Western Assets 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 Western Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Western Assets.
Diversification Opportunities for Fidelity Advisor and Western Assets
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Western is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Financial and Western Assets Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Assets Emerging 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 Financial are associated (or correlated) with Western Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Assets Emerging has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Western Assets go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Western Assets
Assuming the 90 days horizon Fidelity Advisor Financial is expected to generate 3.28 times more return on investment than Western Assets. However, Fidelity Advisor is 3.28 times more volatile than Western Assets Emerging. It trades about 0.27 of its potential returns per unit of risk. Western Assets Emerging is currently generating about 0.08 per unit of risk. If you would invest 3,258 in Fidelity Advisor Financial on November 4, 2024 and sell it today you would earn a total of 182.00 from holding Fidelity Advisor Financial or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Financial vs. Western Assets Emerging
Performance |
| Timeline |
| Fidelity Advisor Fin |
| Western Assets Emerging |
Fidelity Advisor and Western Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Western Assets
The main advantage of trading using opposite Fidelity Advisor and Western Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Western Assets 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 Western Assets will offset losses from the drop in Western Assets' long position.| Fidelity Advisor vs. Old Westbury Short Term | Fidelity Advisor vs. Western Asset Short | Fidelity Advisor vs. Mid Cap 15x Strategy | Fidelity Advisor vs. Kinetics Market Opportunities |
| Western Assets vs. Schwab Small Cap Index | Western Assets vs. Tax Managed Mid Small | Western Assets vs. Lord Abbett Diversified | Western Assets vs. Lord Abbett Diversified |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance |