Correlation Between Fidelity Advisor and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Mainstay Moderate 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 Mainstay Moderate 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 Mainstay Moderate Allocation, you can compare the effects of market volatilities on Fidelity Advisor and Mainstay Moderate 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 Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Mainstay Moderate.
Diversification Opportunities for Fidelity Advisor and Mainstay Moderate
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fidelity and Mainstay is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Health and Mainstay Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate 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 Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Mainstay Moderate
Assuming the 90 days horizon Fidelity Advisor Health is expected to generate 1.71 times more return on investment than Mainstay Moderate. However, Fidelity Advisor is 1.71 times more volatile than Mainstay Moderate Allocation. It trades about 0.09 of its potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about 0.13 per unit of risk. If you would invest 4,509 in Fidelity Advisor Health on September 1, 2024 and sell it today you would earn a total of 415.00 from holding Fidelity Advisor Health or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Fidelity Advisor Health vs. Mainstay Moderate Allocation
Performance |
| Timeline |
| Fidelity Advisor Health |
| Mainstay Moderate |
Fidelity Advisor and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Mainstay Moderate
The main advantage of trading using opposite Fidelity Advisor and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Mainstay Moderate 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 Mainstay Moderate will offset losses from the drop in Mainstay Moderate's 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 |
| Mainstay Moderate vs. Mainstay Tax Free | Mainstay Moderate vs. Mainstay Large Cap | Mainstay Moderate vs. Mainstay Large Cap | Mainstay Moderate vs. Mainstay Large Cap |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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