Correlation Between Fidelity Advisor and Swan Defined
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Swan Defined 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 Swan Defined 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 Swan Defined Risk, you can compare the effects of market volatilities on Fidelity Advisor and Swan Defined 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 Swan Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Swan Defined.
Diversification Opportunities for Fidelity Advisor and Swan Defined
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Swan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Growth and Swan Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Defined Risk 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 Swan Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Defined Risk has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Swan Defined go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Swan Defined
Assuming the 90 days horizon Fidelity Advisor Growth is expected to generate 1.39 times more return on investment than Swan Defined. However, Fidelity Advisor is 1.39 times more volatile than Swan Defined Risk. It trades about 0.11 of its potential returns per unit of risk. Swan Defined Risk is currently generating about 0.02 per unit of risk. If you would invest 10,181 in Fidelity Advisor Growth on August 30, 2024 and sell it today you would earn a total of 9,445 from holding Fidelity Advisor Growth or generate 92.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Growth vs. Swan Defined Risk
Performance |
| Timeline |
| Fidelity Advisor Growth |
| Swan Defined Risk |
Fidelity Advisor and Swan Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Swan Defined
The main advantage of trading using opposite Fidelity Advisor and Swan Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Swan Defined 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 Swan Defined will offset losses from the drop in Swan Defined's long position.| Fidelity Advisor vs. Fidelity Stock Selector | Fidelity Advisor vs. Fidelity Focused Stock | Fidelity Advisor vs. Fidelity Disciplined Equity | Fidelity Advisor vs. Fidelity Stock Selector |
| Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk |
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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