Correlation Between Fidelity Advisor and High Yield
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on Fidelity Advisor and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and High Yield.
Diversification Opportunities for Fidelity Advisor and High Yield
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and High is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Financial and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and High Yield go up and down completely randomly.
Pair Corralation between Fidelity Advisor and High Yield
Assuming the 90 days horizon Fidelity Advisor Financial is expected to generate 4.73 times more return on investment than High Yield. However, Fidelity Advisor is 4.73 times more volatile than High Yield Fund. It trades about 0.15 of its potential returns per unit of risk. High Yield Fund is currently generating about 0.21 per unit of risk. If you would invest 2,590 in Fidelity Advisor Financial on September 14, 2024 and sell it today you would earn a total of 1,349 from holding Fidelity Advisor Financial or generate 52.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Fidelity Advisor Financial vs. High Yield Fund
Performance |
| Timeline |
| Fidelity Advisor Fin |
| High Yield Fund |
Fidelity Advisor and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and High Yield
The main advantage of trading using opposite Fidelity Advisor and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Fidelity Advisor vs. Consumer Finance Portfolio | Fidelity Advisor vs. Insurance Portfolio Insurance | Fidelity Advisor vs. Automotive Portfolio Automotive |
| High Yield vs. Fidelity Advisor Financial | High Yield vs. Transamerica Financial Life | High Yield vs. Blackrock Financial Institutions | High Yield vs. Angel Oak Financial |
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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