Correlation Between Fidelity Advisor and Franklin Strategic
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Franklin Strategic 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 Franklin Strategic 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 Franklin Strategic Income, you can compare the effects of market volatilities on Fidelity Advisor and Franklin Strategic 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 Franklin Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Franklin Strategic.
Diversification Opportunities for Fidelity Advisor and Franklin Strategic
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Franklin is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Diversified and Franklin Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Strategic Income 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 Franklin Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Strategic Income has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Franklin Strategic go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Franklin Strategic
Assuming the 90 days horizon Fidelity Advisor Diversified is expected to generate 3.43 times more return on investment than Franklin Strategic. However, Fidelity Advisor is 3.43 times more volatile than Franklin Strategic Income. It trades about 0.14 of its potential returns per unit of risk. Franklin Strategic Income is currently generating about 0.21 per unit of risk. If you would invest 2,766 in Fidelity Advisor Diversified on September 13, 2024 and sell it today you would earn a total of 51.00 from holding Fidelity Advisor Diversified or generate 1.84% 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. Franklin Strategic Income
Performance |
| Timeline |
| Fidelity Advisor Div |
| Franklin Strategic Income |
Fidelity Advisor and Franklin Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Franklin Strategic
The main advantage of trading using opposite Fidelity Advisor and Franklin Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Franklin Strategic 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 Franklin Strategic will offset losses from the drop in Franklin Strategic'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 |
| Franklin Strategic vs. Franklin Mutual Beacon | Franklin Strategic vs. Templeton Developing Markets | Franklin Strategic vs. Franklin Mutual Global | Franklin Strategic vs. Franklin Mutual Global |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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