Correlation Between Fidelity Advisor and Wells Fargo

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Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Wells Fargo 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 Wells Fargo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Gold and Wells Fargo Advantage, you can compare the effects of market volatilities on Fidelity Advisor and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Wells Fargo.

Diversification Opportunities for Fidelity Advisor and Wells Fargo

FidelityWellsFidelityWellsDiversified Away100%
1.0
  Correlation Coefficient

No risk reduction

The 3 months correlation between Fidelity and Wells is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Gold and Wells Fargo Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Advantage 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 Gold are associated (or correlated) with Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Advantage has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Wells Fargo go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Wells Fargo

Assuming the 90 days horizon Fidelity Advisor Gold is expected to generate 0.99 times more return on investment than Wells Fargo. However, Fidelity Advisor Gold is 1.01 times less risky than Wells Fargo. It trades about 0.13 of its potential returns per unit of risk. Wells Fargo Advantage is currently generating about 0.13 per unit of risk. If you would invest  2,616  in Fidelity Advisor Gold on November 25, 2024 and sell it today you would earn a total of  325.00  from holding Fidelity Advisor Gold or generate 12.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Fidelity Advisor Gold  vs.  Wells Fargo Advantage

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 05101520
JavaScript chart by amCharts 3.21.15FGDIX EKWYX
       Timeline  
Fidelity Advisor Gold 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Gold are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Fidelity Advisor showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb252627282930
Wells Fargo Advantage 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Wells Fargo Advantage are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Wells Fargo showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb58606264666870

Fidelity Advisor and Wells Fargo Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.22-3.91-2.6-1.290.01.372.794.215.637.05 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15FGDIX EKWYX
       Returns  

Pair Trading with Fidelity Advisor and Wells Fargo

The main advantage of trading using opposite Fidelity Advisor and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo's long position.
The idea behind Fidelity Advisor Gold and Wells Fargo Advantage pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stocks Directory module to find actively traded stocks across global markets.

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