Correlation Between Fidelity Global and Fidelity Advantage

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Fidelity Global and Fidelity Advantage 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 Global and Fidelity Advantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Global Equity and Fidelity Advantage Bitcoin, you can compare the effects of market volatilities on Fidelity Global and Fidelity Advantage 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 Global with a short position of Fidelity Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Global and Fidelity Advantage.

Diversification Opportunities for Fidelity Global and Fidelity Advantage

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Fidelity and Fidelity is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Global Equity and Fidelity Advantage Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advantage and Fidelity Global 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 Global Equity are associated (or correlated) with Fidelity Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advantage has no effect on the direction of Fidelity Global i.e., Fidelity Global and Fidelity Advantage go up and down completely randomly.

Pair Corralation between Fidelity Global and Fidelity Advantage

Assuming the 90 days trading horizon Fidelity Global is expected to generate 2.85 times less return on investment than Fidelity Advantage. But when comparing it to its historical volatility, Fidelity Global Equity is 4.87 times less risky than Fidelity Advantage. It trades about 0.33 of its potential returns per unit of risk. Fidelity Advantage Bitcoin is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,420  in Fidelity Advantage Bitcoin on October 23, 2024 and sell it today you would earn a total of  492.00  from holding Fidelity Advantage Bitcoin or generate 11.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy94.74%
ValuesDaily Returns

Fidelity Global Equity  vs.  Fidelity Advantage Bitcoin

 Performance 
       Timeline  
Fidelity Global Equity 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Global Equity are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Fidelity Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
Fidelity Advantage 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advantage Bitcoin are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fidelity Advantage displayed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Global and Fidelity Advantage Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fidelity Global and Fidelity Advantage

The main advantage of trading using opposite Fidelity Global and Fidelity Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Global position performs unexpectedly, Fidelity Advantage 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 Advantage will offset losses from the drop in Fidelity Advantage's long position.
The idea behind Fidelity Global Equity and Fidelity Advantage Bitcoin 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.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

Other Complementary Tools

Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments