Correlation Between Fidelity Advisor and American Growth
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and American Growth 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 American Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Financial and American Growth Fund, you can compare the effects of market volatilities on Fidelity Advisor and American Growth 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 American Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and American Growth.
Diversification Opportunities for Fidelity Advisor and American Growth
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and American is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Financial and American Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Growth 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 Financial are associated (or correlated) with American Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Growth has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and American Growth go up and down completely randomly.
Pair Corralation between Fidelity Advisor and American Growth
Assuming the 90 days horizon Fidelity Advisor Financial is expected to generate 0.7 times more return on investment than American Growth. However, Fidelity Advisor Financial is 1.43 times less risky than American Growth. It trades about 0.31 of its potential returns per unit of risk. American Growth Fund is currently generating about -0.01 per unit of risk. If you would invest 3,607 in Fidelity Advisor Financial on September 4, 2024 and sell it today you would earn a total of 434.00 from holding Fidelity Advisor Financial or generate 12.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fidelity Advisor Financial vs. American Growth Fund
Performance |
| Timeline |
| Fidelity Advisor Fin |
| American Growth |
Fidelity Advisor and American Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and American Growth
The main advantage of trading using opposite Fidelity Advisor and American Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, American Growth 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 American Growth will offset losses from the drop in American Growth's long position.| Fidelity Advisor vs. Queens Road Small | Fidelity Advisor vs. Amg River Road | Fidelity Advisor vs. Royce Opportunity Fund | Fidelity Advisor vs. Victory Rs Partners |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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