Correlation Between Fidelity Advisor and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Guinness Atkinson 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 Guinness Atkinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Energy and Guinness Atkinson Global, you can compare the effects of market volatilities on Fidelity Advisor and Guinness Atkinson 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 Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Guinness Atkinson.
Diversification Opportunities for Fidelity Advisor and Guinness Atkinson
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Guinness is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Energy and Guinness Atkinson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Global 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 Energy are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Global has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Guinness Atkinson go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Guinness Atkinson
Assuming the 90 days horizon Fidelity Advisor Energy is expected to generate 1.38 times more return on investment than Guinness Atkinson. However, Fidelity Advisor is 1.38 times more volatile than Guinness Atkinson Global. It trades about 0.27 of its potential returns per unit of risk. Guinness Atkinson Global is currently generating about 0.12 per unit of risk. If you would invest 4,482 in Fidelity Advisor Energy on September 1, 2024 and sell it today you would earn a total of 287.00 from holding Fidelity Advisor Energy or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Energy vs. Guinness Atkinson Global
Performance |
| Timeline |
| Fidelity Advisor Energy |
| Guinness Atkinson Global |
Fidelity Advisor and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Guinness Atkinson
The main advantage of trading using opposite Fidelity Advisor and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.| Fidelity Advisor vs. Commonwealth Global Fund | Fidelity Advisor vs. Eic Value Fund | Fidelity Advisor vs. Rbc Funds Trust | Fidelity Advisor vs. Small Cap Stock |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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