Correlation Between Fidelity Advisor and State Street
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and State Street 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 State Street 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 State Street Global, you can compare the effects of market volatilities on Fidelity Advisor and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and State Street.
Diversification Opportunities for Fidelity Advisor and State Street
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidelity and State is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Energy and State Street Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Global 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Global has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and State Street go up and down completely randomly.
Pair Corralation between Fidelity Advisor and State Street
Assuming the 90 days horizon Fidelity Advisor Energy is expected to generate 1.6 times more return on investment than State Street. However, Fidelity Advisor is 1.6 times more volatile than State Street Global. It trades about 0.3 of its potential returns per unit of risk. State Street Global is currently generating about -0.1 per unit of risk. If you would invest 4,791 in Fidelity Advisor Energy on September 3, 2024 and sell it today you would earn a total of 310.00 from holding Fidelity Advisor Energy or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Energy vs. State Street Global
Performance |
| Timeline |
| Fidelity Advisor Energy |
| State Street Global |
Fidelity Advisor and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and State Street
The main advantage of trading using opposite Fidelity Advisor and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Fidelity Advisor vs. Sprott Gold Equity | Fidelity Advisor vs. Precious Metals And | Fidelity Advisor vs. Gamco Global Gold | Fidelity Advisor vs. Vy Goldman Sachs |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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