Correlation Between Fidelity Advisor and Oklahoma Municipal
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Oklahoma Municipal 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 Oklahoma Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Energy and Oklahoma Municipal Fund, you can compare the effects of market volatilities on Fidelity Advisor and Oklahoma Municipal 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 Oklahoma Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Oklahoma Municipal.
Diversification Opportunities for Fidelity Advisor and Oklahoma Municipal
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fidelity and Oklahoma is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Energy and Oklahoma Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma Municipal 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 Energy are associated (or correlated) with Oklahoma Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oklahoma Municipal has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Oklahoma Municipal go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Oklahoma Municipal
Assuming the 90 days horizon Fidelity Advisor Energy is expected to generate 5.85 times more return on investment than Oklahoma Municipal. However, Fidelity Advisor is 5.85 times more volatile than Oklahoma Municipal Fund. It trades about 0.02 of its potential returns per unit of risk. Oklahoma Municipal Fund is currently generating about 0.05 per unit of risk. If you would invest 4,497 in Fidelity Advisor Energy on September 14, 2024 and sell it today you would earn a total of 398.00 from holding Fidelity Advisor Energy or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Energy vs. Oklahoma Municipal Fund
Performance |
| Timeline |
| Fidelity Advisor Energy |
| Oklahoma Municipal |
Fidelity Advisor and Oklahoma Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Oklahoma Municipal
The main advantage of trading using opposite Fidelity Advisor and Oklahoma Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Oklahoma Municipal 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 Oklahoma Municipal will offset losses from the drop in Oklahoma Municipal's long position.| Fidelity Advisor vs. Sentinel Small Pany | Fidelity Advisor vs. Davenport Small Cap | Fidelity Advisor vs. T Rowe Price | Fidelity Advisor vs. Lord Abbett Diversified |
| Oklahoma Municipal vs. Forum Real Estate | Oklahoma Municipal vs. Columbia Real Estate | Oklahoma Municipal vs. Pender Real Estate | Oklahoma Municipal vs. Prudential Real Estate |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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