Correlation Between Franklin Strategic and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Franklin Strategic 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 Franklin Strategic and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Strategic Series and Fidelity Advisor Financial, you can compare the effects of market volatilities on Franklin Strategic 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 Franklin Strategic with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Strategic and Fidelity Advisor.
Diversification Opportunities for Franklin Strategic and Fidelity Advisor
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Fidelity is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Strategic Series and Fidelity Advisor Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Fin and Franklin Strategic 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 Franklin Strategic Series 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 Fin has no effect on the direction of Franklin Strategic i.e., Franklin Strategic and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Franklin Strategic and Fidelity Advisor
Assuming the 90 days horizon Franklin Strategic Series is expected to under-perform the Fidelity Advisor. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Strategic Series is 4.17 times less risky than Fidelity Advisor. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Fidelity Advisor Financial is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,906 in Fidelity Advisor Financial on September 14, 2024 and sell it today you would earn a total of 33.00 from holding Fidelity Advisor Financial or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Strategic Series vs. Fidelity Advisor Financial
Performance |
| Timeline |
| Franklin Strategic Series |
| Fidelity Advisor Fin |
Franklin Strategic and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Strategic and Fidelity Advisor
The main advantage of trading using opposite Franklin Strategic and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Strategic 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.| Franklin Strategic vs. Franklin Mutual Beacon | Franklin Strategic vs. Templeton Developing Markets | Franklin Strategic vs. Franklin Mutual Global | Franklin Strategic vs. Franklin Mutual Global |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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