Correlation Between Fidelity Puritan and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Fidelity Advisor 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 Puritan and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Puritan Fund and Fidelity Advisor Energy, you can compare the effects of market volatilities on Fidelity Puritan and Fidelity Advisor 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 Puritan with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Fidelity Advisor.
Diversification Opportunities for Fidelity Puritan and Fidelity Advisor
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Fidelity is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Fidelity Advisor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Energy and Fidelity Puritan 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 Puritan Fund are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Energy has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Fidelity Advisor
Assuming the 90 days horizon Fidelity Puritan Fund is expected to generate 0.55 times more return on investment than Fidelity Advisor. However, Fidelity Puritan Fund is 1.83 times less risky than Fidelity Advisor. It trades about 0.13 of its potential returns per unit of risk. Fidelity Advisor Energy is currently generating about 0.03 per unit of risk. If you would invest 2,120 in Fidelity Puritan Fund on September 14, 2024 and sell it today you would earn a total of 487.00 from holding Fidelity Puritan Fund or generate 22.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Puritan Fund vs. Fidelity Advisor Energy
Performance |
| Timeline |
| Fidelity Puritan |
| Fidelity Advisor Energy |
Fidelity Puritan and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Fidelity Advisor
The main advantage of trading using opposite Fidelity Puritan and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.| Fidelity Puritan vs. Calamos Global Equity | Fidelity Puritan vs. Qs Global Equity | Fidelity Puritan vs. Huber Capital Equity | Fidelity Puritan vs. Cutler Equity |
| Fidelity Advisor vs. L Abbett Growth | Fidelity Advisor vs. Praxis Growth Index | Fidelity Advisor vs. Pace Smallmedium Growth | Fidelity Advisor vs. Smallcap Growth Fund |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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