Correlation Between Aggressive Growth and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Aggressive Growth 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 Aggressive Growth and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aggressive Growth Allocation and Fidelity Advisor Freedom, you can compare the effects of market volatilities on Aggressive Growth 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 Aggressive Growth with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aggressive Growth and Fidelity Advisor.
Diversification Opportunities for Aggressive Growth and Fidelity Advisor
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aggressive and Fidelity is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Allocation and Fidelity Advisor Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Freedom and Aggressive Growth 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 Aggressive Growth Allocation 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 Freedom has no effect on the direction of Aggressive Growth i.e., Aggressive Growth and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Aggressive Growth and Fidelity Advisor
Assuming the 90 days horizon Aggressive Growth is expected to generate 1.02 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Aggressive Growth Allocation is 1.11 times less risky than Fidelity Advisor. It trades about 0.13 of its potential returns per unit of risk. Fidelity Advisor Freedom is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,151 in Fidelity Advisor Freedom on August 26, 2024 and sell it today you would earn a total of 265.00 from holding Fidelity Advisor Freedom or generate 23.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aggressive Growth Allocation vs. Fidelity Advisor Freedom
Performance |
| Timeline |
| Aggressive Growth |
| Fidelity Advisor Freedom |
Aggressive Growth and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aggressive Growth and Fidelity Advisor
The main advantage of trading using opposite Aggressive Growth and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aggressive Growth 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.| Aggressive Growth vs. Fidelity Asset Manager | Aggressive Growth vs. Fidelity Asset Manager | Aggressive Growth vs. Fidelity Asset Manager | Aggressive Growth vs. Fidelity International Capital |
| Fidelity Advisor vs. Fidelity Freedom 2015 | Fidelity Advisor vs. Fidelity Puritan Fund | Fidelity Advisor vs. Fidelity Puritan Fund | Fidelity Advisor vs. Fidelity Pennsylvania Municipal |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |