Correlation Between Fidelity Advisor and Consumer Staples
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Consumer Staples 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 Consumer Staples into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Health and Consumer Staples Portfolio, you can compare the effects of market volatilities on Fidelity Advisor and Consumer Staples 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 Consumer Staples. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Consumer Staples.
Diversification Opportunities for Fidelity Advisor and Consumer Staples
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Consumer is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Health and Consumer Staples Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Staples Por 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 Health are associated (or correlated) with Consumer Staples. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Staples Por has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Consumer Staples go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Consumer Staples
Assuming the 90 days horizon Fidelity Advisor is expected to generate 1.27 times less return on investment than Consumer Staples. In addition to that, Fidelity Advisor is 1.6 times more volatile than Consumer Staples Portfolio. It trades about 0.14 of its total potential returns per unit of risk. Consumer Staples Portfolio is currently generating about 0.28 per unit of volatility. If you would invest 9,556 in Consumer Staples Portfolio on September 1, 2024 and sell it today you would earn a total of 373.00 from holding Consumer Staples Portfolio or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Health vs. Consumer Staples Portfolio
Performance |
| Timeline |
| Fidelity Advisor Health |
| Consumer Staples Por |
Fidelity Advisor and Consumer Staples Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Consumer Staples
The main advantage of trading using opposite Fidelity Advisor and Consumer Staples positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Consumer Staples 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 Consumer Staples will offset losses from the drop in Consumer Staples' long position.| Fidelity Advisor vs. Fidelity Advisor Technology | Fidelity Advisor vs. Fidelity Advisor Biotechnology | Fidelity Advisor vs. Fidelity Advisor Financial | Fidelity Advisor vs. Fidelity Advisor Utilities |
| Consumer Staples vs. Fidelity Advisor Health | Consumer Staples vs. Fidelity Advisor Biotechnology | Consumer Staples vs. Materials Portfolio Fidelity | Consumer Staples vs. Consumer Staples Portfolio |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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