Correlation Between Fidelity Salem and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Fidelity Salem 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 Salem 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 Salem Street and Fidelity Advisor Large, you can compare the effects of market volatilities on Fidelity Salem 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 Salem with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Salem and Fidelity Advisor.
Diversification Opportunities for Fidelity Salem and Fidelity Advisor
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Fidelity is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Salem Street and Fidelity Advisor Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Large and Fidelity Salem 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 Salem Street 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 Large has no effect on the direction of Fidelity Salem i.e., Fidelity Salem and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Fidelity Salem and Fidelity Advisor
Assuming the 90 days horizon Fidelity Salem Street is expected to under-perform the Fidelity Advisor. In addition to that, Fidelity Salem is 1.1 times more volatile than Fidelity Advisor Large. It trades about -0.01 of its total potential returns per unit of risk. Fidelity Advisor Large is currently generating about 0.13 per unit of volatility. If you would invest 4,569 in Fidelity Advisor Large on September 2, 2024 and sell it today you would earn a total of 664.00 from holding Fidelity Advisor Large or generate 14.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Salem Street vs. Fidelity Advisor Large
Performance |
| Timeline |
| Fidelity Salem Street |
| Fidelity Advisor Large |
Fidelity Salem and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Salem and Fidelity Advisor
The main advantage of trading using opposite Fidelity Salem and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Salem 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 Salem vs. Artisan Select Equity | Fidelity Salem vs. Ultra Short Fixed Income | Fidelity Salem vs. Calamos Global Equity | Fidelity Salem vs. Scharf Fund Retail |
| Fidelity Advisor vs. Fidelity Advisor Growth | Fidelity Advisor vs. Fidelity Advisor Small | Fidelity Advisor vs. Fidelity Advisor Equity | Fidelity Advisor 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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