Correlation Between Fidelity Advisor and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Growth Strategy 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 Growth Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Freedom and Growth Strategy Fund, you can compare the effects of market volatilities on Fidelity Advisor and Growth Strategy 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 Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Growth Strategy.
Diversification Opportunities for Fidelity Advisor and Growth Strategy
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Growth is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Freedom and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Freedom are associated (or correlated) with Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Growth Strategy go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Growth Strategy
Assuming the 90 days horizon Fidelity Advisor Freedom is expected to generate 1.22 times more return on investment than Growth Strategy. However, Fidelity Advisor is 1.22 times more volatile than Growth Strategy Fund. It trades about 0.11 of its potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.11 per unit of risk. If you would invest 1,313 in Fidelity Advisor Freedom on September 12, 2024 and sell it today you would earn a total of 55.00 from holding Fidelity Advisor Freedom or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Freedom vs. Growth Strategy Fund
Performance |
| Timeline |
| Fidelity Advisor Freedom |
| Growth Strategy |
Fidelity Advisor and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Growth Strategy
The main advantage of trading using opposite Fidelity Advisor and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Growth Strategy 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 Growth Strategy will offset losses from the drop in Growth Strategy's long position.| Fidelity Advisor vs. Virtus Multi Sector Short | Fidelity Advisor vs. Aqr Long Short Equity | Fidelity Advisor vs. Touchstone Ultra Short | Fidelity Advisor vs. Alpine Ultra Short |
| Growth Strategy vs. Smallcap Growth Fund | Growth Strategy vs. T Rowe Price | Growth Strategy vs. L Abbett Growth | Growth Strategy vs. Rational Defensive Growth |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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