Correlation Between Fidelity Advisor and Oberweis Micro
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Oberweis Micro 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 Oberweis Micro 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 Oberweis Micro Cap Fund, you can compare the effects of market volatilities on Fidelity Advisor and Oberweis Micro 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 Oberweis Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Oberweis Micro.
Diversification Opportunities for Fidelity Advisor and Oberweis Micro
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Oberweis is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Financial and Oberweis Micro Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Micro Cap 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 Oberweis Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis Micro Cap has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Oberweis Micro go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Oberweis Micro
Assuming the 90 days horizon Fidelity Advisor Financial is expected to generate 0.48 times more return on investment than Oberweis Micro. However, Fidelity Advisor Financial is 2.1 times less risky than Oberweis Micro. It trades about -0.04 of its potential returns per unit of risk. Oberweis Micro Cap Fund is currently generating about -0.06 per unit of risk. If you would invest 3,944 in Fidelity Advisor Financial on September 12, 2024 and sell it today you would lose (24.00) from holding Fidelity Advisor Financial or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Financial vs. Oberweis Micro Cap Fund
Performance |
| Timeline |
| Fidelity Advisor Fin |
| Oberweis Micro Cap |
Fidelity Advisor and Oberweis Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Oberweis Micro
The main advantage of trading using opposite Fidelity Advisor and Oberweis Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Oberweis Micro 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 Oberweis Micro will offset losses from the drop in Oberweis Micro's long position.| Fidelity Advisor vs. Oklahoma Municipal Fund | Fidelity Advisor vs. California High Yield Municipal | Fidelity Advisor vs. T Rowe Price | Fidelity Advisor vs. T Rowe Price |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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