Correlation Between Fidelity Advisor and Fidelity Magellan
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Fidelity Magellan 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 Fidelity Magellan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Growth and Fidelity Magellan Fund, you can compare the effects of market volatilities on Fidelity Advisor and Fidelity Magellan 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 Fidelity Magellan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Fidelity Magellan.
Diversification Opportunities for Fidelity Advisor and Fidelity Magellan
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Growth and Fidelity Magellan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Magellan 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 Growth are associated (or correlated) with Fidelity Magellan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Magellan has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Fidelity Magellan go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Fidelity Magellan
Assuming the 90 days horizon Fidelity Advisor is expected to generate 1.07 times less return on investment than Fidelity Magellan. But when comparing it to its historical volatility, Fidelity Advisor Growth is 1.47 times less risky than Fidelity Magellan. It trades about 0.16 of its potential returns per unit of risk. Fidelity Magellan Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,196 in Fidelity Magellan Fund on September 2, 2024 and sell it today you would earn a total of 379.00 from holding Fidelity Magellan Fund or generate 31.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Growth vs. Fidelity Magellan Fund
Performance |
| Timeline |
| Fidelity Advisor Growth |
| Fidelity Magellan |
Fidelity Advisor and Fidelity Magellan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Fidelity Magellan
The main advantage of trading using opposite Fidelity Advisor and Fidelity Magellan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Fidelity Magellan 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 Magellan will offset losses from the drop in Fidelity Magellan's long position.| Fidelity Advisor vs. Fidelity Magellan Fund | Fidelity Advisor vs. Fidelity Growth Pany | Fidelity Advisor vs. Fidelity Puritan Fund | Fidelity Advisor vs. Fidelity Blue Chip |
| Fidelity Magellan vs. Fidelity Growth Income | Fidelity Magellan vs. Fidelity Equity Income Fund | Fidelity Magellan vs. Fidelity Contrafund | Fidelity Magellan vs. Fidelity Growth Pany |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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