Correlation Between Fidelity Advisor and Eafe Fund
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Eafe Fund 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 Eafe Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Diversified and The Eafe Fund, you can compare the effects of market volatilities on Fidelity Advisor and Eafe Fund 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 Eafe Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Eafe Fund.
Diversification Opportunities for Fidelity Advisor and Eafe Fund
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Eafe is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Diversified and The Eafe Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eafe Fund 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 Diversified are associated (or correlated) with Eafe Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eafe Fund has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Eafe Fund go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Eafe Fund
Assuming the 90 days horizon Fidelity Advisor Diversified is expected to generate 0.33 times more return on investment than Eafe Fund. However, Fidelity Advisor Diversified is 3.06 times less risky than Eafe Fund. It trades about 0.18 of its potential returns per unit of risk. The Eafe Fund is currently generating about -0.12 per unit of risk. If you would invest 2,532 in Fidelity Advisor Diversified on October 21, 2024 and sell it today you would earn a total of 56.00 from holding Fidelity Advisor Diversified or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Diversified vs. The Eafe Fund
Performance |
| Timeline |
| Fidelity Advisor Div |
| Eafe Fund |
Fidelity Advisor and Eafe Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Eafe Fund
The main advantage of trading using opposite Fidelity Advisor and Eafe Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Eafe Fund 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 Eafe Fund will offset losses from the drop in Eafe Fund's long position.| Fidelity Advisor vs. Fidelity International Growth | Fidelity Advisor vs. Foreign Smaller Panies | Fidelity Advisor vs. Hartford Small Cap | Fidelity Advisor vs. Fidelity Small Cap |
| Eafe Fund vs. Moderate Balanced Allocation | Eafe Fund vs. Putnam Retirement Advantage | Eafe Fund vs. Tiaa Cref Lifestyle Moderate | Eafe Fund vs. Tiaa Cref Lifestyle Moderate |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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