Correlation Between Fidelity Advisor and Credit Suisse

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Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Credit Suisse 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 Credit Suisse 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 Credit Suisse Strategic, you can compare the effects of market volatilities on Fidelity Advisor and Credit Suisse 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 Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Credit Suisse.

Diversification Opportunities for Fidelity Advisor and Credit Suisse

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Fidelity and Credit is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Technology and Credit Suisse Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Strategic 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 Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse Strategic has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Credit Suisse go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Credit Suisse

Assuming the 90 days horizon Fidelity Advisor Technology is expected to generate 11.21 times more return on investment than Credit Suisse. However, Fidelity Advisor is 11.21 times more volatile than Credit Suisse Strategic. It trades about 0.11 of its potential returns per unit of risk. Credit Suisse Strategic is currently generating about 0.18 per unit of risk. If you would invest  14,075  in Fidelity Advisor Technology on September 13, 2024 and sell it today you would earn a total of  745.00  from holding Fidelity Advisor Technology or generate 5.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Fidelity Advisor Technology  vs.  Credit Suisse Strategic

 Performance 
       Timeline  
Fidelity Advisor Tec 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Technology are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Fidelity Advisor showed solid returns over the last few months and may actually be approaching a breakup point.
Credit Suisse Strategic 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Credit Suisse Strategic are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Credit Suisse is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Advisor and Credit Suisse Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fidelity Advisor and Credit Suisse

The main advantage of trading using opposite Fidelity Advisor and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Credit Suisse 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 Credit Suisse will offset losses from the drop in Credit Suisse's long position.
The idea behind Fidelity Advisor Technology and Credit Suisse Strategic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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