Correlation Between Fidelity Advisor and Regional Bank
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Regional Bank 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 Regional Bank 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 Regional Bank Fund, you can compare the effects of market volatilities on Fidelity Advisor and Regional Bank 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 Regional Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Regional Bank.
Diversification Opportunities for Fidelity Advisor and Regional Bank
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Regional is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Diversified and Regional Bank Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Bank 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 Regional Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Bank has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Regional Bank go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Regional Bank
Assuming the 90 days horizon Fidelity Advisor is expected to generate 61.07 times less return on investment than Regional Bank. But when comparing it to its historical volatility, Fidelity Advisor Diversified is 3.89 times less risky than Regional Bank. It trades about 0.01 of its potential returns per unit of risk. Regional Bank Fund is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,951 in Regional Bank Fund on September 2, 2024 and sell it today you would earn a total of 431.00 from holding Regional Bank Fund or generate 14.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Advisor Diversified vs. Regional Bank Fund
Performance |
| Timeline |
| Fidelity Advisor Div |
| Regional Bank |
Fidelity Advisor and Regional Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Regional Bank
The main advantage of trading using opposite Fidelity Advisor and Regional Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Regional Bank 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 Regional Bank will offset losses from the drop in Regional Bank'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 |
| Regional Bank vs. Regional Bank Fund | Regional Bank vs. Multimanager Lifestyle Moderate | Regional Bank vs. Multimanager Lifestyle Balanced | Regional Bank vs. Multimanager Lifestyle Aggressive |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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