Correlation Between Fidelity Stock and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Fidelity Stock and Fidelity Advisor 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 Stock and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Stock Selector and Fidelity Advisor Value, you can compare the effects of market volatilities on Fidelity Stock and Fidelity Advisor 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 Stock with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Stock and Fidelity Advisor.
Diversification Opportunities for Fidelity Stock and Fidelity Advisor
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Stock Selector and Fidelity Advisor Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Value and Fidelity Stock 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 Stock Selector are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Value has no effect on the direction of Fidelity Stock i.e., Fidelity Stock and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Fidelity Stock and Fidelity Advisor
Assuming the 90 days horizon Fidelity Stock Selector is expected to generate 1.08 times more return on investment than Fidelity Advisor. However, Fidelity Stock is 1.08 times more volatile than Fidelity Advisor Value. It trades about 0.06 of its potential returns per unit of risk. Fidelity Advisor Value is currently generating about 0.06 per unit of risk. If you would invest 2,863 in Fidelity Stock Selector on August 24, 2024 and sell it today you would earn a total of 1,153 from holding Fidelity Stock Selector or generate 40.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Stock Selector vs. Fidelity Advisor Value
Performance |
| Timeline |
| Fidelity Stock Selector |
| Fidelity Advisor Value |
Fidelity Stock and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Stock and Fidelity Advisor
The main advantage of trading using opposite Fidelity Stock and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Stock position performs unexpectedly, Fidelity Advisor 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 Advisor will offset losses from the drop in Fidelity Advisor's long position.| Fidelity Stock vs. Fidelity Stock Selector | Fidelity Stock vs. Fidelity Disciplined Equity | Fidelity Stock vs. Ab Flexfee Thematic | Fidelity Stock vs. Fidelity Value Fund |
| Fidelity Advisor vs. Fidelity Small Cap | Fidelity Advisor vs. Fidelity Mega Cap | Fidelity Advisor vs. Fidelity Value Discovery | Fidelity Advisor vs. Fidelity Mid Cap |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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