Correlation Between Fidelity Advisor and Leisure Fund
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Leisure Fund 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 Leisure Fund 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 Leisure Fund Class, you can compare the effects of market volatilities on Fidelity Advisor and Leisure Fund 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 Leisure Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Leisure Fund.
Diversification Opportunities for Fidelity Advisor and Leisure Fund
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Leisure is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Energy and Leisure Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leisure Fund Class 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 Leisure Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leisure Fund Class has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Leisure Fund go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Leisure Fund
Assuming the 90 days horizon Fidelity Advisor Energy is expected to under-perform the Leisure Fund. In addition to that, Fidelity Advisor is 1.62 times more volatile than Leisure Fund Class. It trades about -0.13 of its total potential returns per unit of risk. Leisure Fund Class is currently generating about 0.23 per unit of volatility. If you would invest 8,498 in Leisure Fund Class on September 13, 2024 and sell it today you would earn a total of 236.00 from holding Leisure Fund Class or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Energy vs. Leisure Fund Class
Performance |
| Timeline |
| Fidelity Advisor Energy |
| Leisure Fund Class |
Fidelity Advisor and Leisure Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Leisure Fund
The main advantage of trading using opposite Fidelity Advisor and Leisure Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Leisure Fund 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 Leisure Fund will offset losses from the drop in Leisure Fund's long position.| Fidelity Advisor vs. California High Yield Municipal | Fidelity Advisor vs. Ishares Municipal Bond | Fidelity Advisor vs. Pace Municipal Fixed | Fidelity Advisor vs. Alliancebernstein National Municipal |
| Leisure Fund vs. Deutsche Global Inflation | Leisure Fund vs. Loomis Sayles Inflation | Leisure Fund vs. Guidepath Managed Futures | Leisure Fund vs. Ab Bond Inflation |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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