Correlation Between Fidelity Advisor and Fidelity Municipal
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Fidelity Municipal 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 Municipal 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 Municipal Income, you can compare the effects of market volatilities on Fidelity Advisor and Fidelity Municipal 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 Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Fidelity Municipal.
Diversification Opportunities for Fidelity Advisor and Fidelity Municipal
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Fidelity is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Growth and Fidelity Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Municipal Income 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 Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Municipal Income has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Fidelity Municipal go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Fidelity Municipal
Assuming the 90 days horizon Fidelity Advisor Growth is expected to generate 4.75 times more return on investment than Fidelity Municipal. However, Fidelity Advisor is 4.75 times more volatile than Fidelity Municipal Income. It trades about 0.14 of its potential returns per unit of risk. Fidelity Municipal Income is currently generating about 0.06 per unit of risk. If you would invest 15,967 in Fidelity Advisor Growth on August 30, 2024 and sell it today you would earn a total of 1,685 from holding Fidelity Advisor Growth or generate 10.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Growth vs. Fidelity Municipal Income
Performance |
| Timeline |
| Fidelity Advisor Growth |
| Fidelity Municipal Income |
Fidelity Advisor and Fidelity Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Fidelity Municipal
The main advantage of trading using opposite Fidelity Advisor and Fidelity Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Fidelity Municipal 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 Municipal will offset losses from the drop in Fidelity Municipal's long position.| Fidelity Advisor vs. Jhancock Diversified Macro | Fidelity Advisor vs. Harbor Diversified International | Fidelity Advisor vs. Tiaa Cref Smallmid Cap Equity | Fidelity Advisor vs. Principal Lifetime Hybrid |
| Fidelity Municipal vs. Franklin Federal Limited Term | Fidelity Municipal vs. Aqr Long Short Equity | Fidelity Municipal vs. The Short Term | Fidelity Municipal vs. Short Intermediate Bond 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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