Correlation Between Fidelity Advisor and Kansas Municipal
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Kansas 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 Kansas Municipal 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 Kansas Municipal Fund, you can compare the effects of market volatilities on Fidelity Advisor and Kansas 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 Kansas Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Kansas Municipal.
Diversification Opportunities for Fidelity Advisor and Kansas Municipal
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Kansas is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Financial and Kansas Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kansas 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 Financial are associated (or correlated) with Kansas Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kansas Municipal has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Kansas Municipal go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Kansas Municipal
Assuming the 90 days horizon Fidelity Advisor Financial is expected to generate 5.5 times more return on investment than Kansas Municipal. However, Fidelity Advisor is 5.5 times more volatile than Kansas Municipal Fund. It trades about 0.21 of its potential returns per unit of risk. Kansas Municipal Fund is currently generating about 0.13 per unit of risk. If you would invest 3,666 in Fidelity Advisor Financial on August 28, 2024 and sell it today you would earn a total of 323.00 from holding Fidelity Advisor Financial or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Financial vs. Kansas Municipal Fund
Performance |
| Timeline |
| Fidelity Advisor Fin |
| Kansas Municipal |
Fidelity Advisor and Kansas Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Kansas Municipal
The main advantage of trading using opposite Fidelity Advisor and Kansas Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Kansas 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 Kansas Municipal will offset losses from the drop in Kansas Municipal's long position.| Fidelity Advisor vs. Jhancock Real Estate | Fidelity Advisor vs. Us Real Estate | Fidelity Advisor vs. Commonwealth Real Estate | Fidelity Advisor vs. Franklin Real Estate |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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