Correlation Between Fidelity Advisor and Thompson Bond
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Thompson Bond 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 Thompson Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Floating and Thompson Bond Fund, you can compare the effects of market volatilities on Fidelity Advisor and Thompson Bond 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 Thompson Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Thompson Bond.
Diversification Opportunities for Fidelity Advisor and Thompson Bond
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Thompson is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Floating and Thompson Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thompson Bond 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 Floating are associated (or correlated) with Thompson Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thompson Bond has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Thompson Bond go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Thompson Bond
Assuming the 90 days horizon Fidelity Advisor Floating is expected to under-perform the Thompson Bond. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Advisor Floating is 2.83 times less risky than Thompson Bond. The mutual fund trades about -0.22 of its potential returns per unit of risk. The Thompson Bond Fund is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 1,038 in Thompson Bond Fund on November 8, 2024 and sell it today you would earn a total of 14.00 from holding Thompson Bond Fund or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Floating vs. Thompson Bond Fund
Performance |
| Timeline |
| Fidelity Advisor Floating |
| Thompson Bond |
Fidelity Advisor and Thompson Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Thompson Bond
The main advantage of trading using opposite Fidelity Advisor and Thompson Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Thompson Bond 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 Thompson Bond will offset losses from the drop in Thompson Bond's long position.| Fidelity Advisor vs. Fidelity High Income | Fidelity Advisor vs. Fidelity New Markets | Fidelity Advisor vs. Fidelity Capital Income | Fidelity Advisor vs. Fidelity Total Bond |
| Thompson Bond vs. Tcw Total Return | Thompson Bond vs. Amg Yacktman Focused | Thompson Bond vs. Fidelity Advisor Floating | Thompson Bond vs. Doubleline Total Return |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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