Correlation Between Fidelity Advisor and American Beacon
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and American Beacon 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 Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Technology and American Beacon Bridgeway, you can compare the effects of market volatilities on Fidelity Advisor and American Beacon 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 Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and American Beacon.
Diversification Opportunities for Fidelity Advisor and American Beacon
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and American is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Technology and American Beacon Bridgeway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Bridgeway 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 Technology are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Bridgeway has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and American Beacon go up and down completely randomly.
Pair Corralation between Fidelity Advisor and American Beacon
Assuming the 90 days horizon Fidelity Advisor Technology is expected to generate 1.52 times more return on investment than American Beacon. However, Fidelity Advisor is 1.52 times more volatile than American Beacon Bridgeway. It trades about 0.08 of its potential returns per unit of risk. American Beacon Bridgeway is currently generating about 0.06 per unit of risk. If you would invest 10,530 in Fidelity Advisor Technology on August 30, 2024 and sell it today you would earn a total of 3,967 from holding Fidelity Advisor Technology or generate 37.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Technology vs. American Beacon Bridgeway
Performance |
| Timeline |
| Fidelity Advisor Tec |
| American Beacon Bridgeway |
Fidelity Advisor and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and American Beacon
The main advantage of trading using opposite Fidelity Advisor and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, American Beacon 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 Beacon will offset losses from the drop in American Beacon's long position.| Fidelity Advisor vs. Fidelity Advisor Health | Fidelity Advisor vs. Fidelity Advisor Financial | Fidelity Advisor vs. Fidelity Advisor Energy | Fidelity Advisor vs. Fidelity Advisor Semiconductors |
| American Beacon vs. Janus Global Technology | American Beacon vs. Dreyfus Technology Growth | American Beacon vs. Allianzgi Technology Fund | American Beacon vs. Fidelity Advisor Technology |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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