Correlation Between Fidelity Advisor and Kensington Active
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Kensington Active 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 Kensington Active 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 Kensington Active Advantage, you can compare the effects of market volatilities on Fidelity Advisor and Kensington Active 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 Kensington Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Kensington Active.
Diversification Opportunities for Fidelity Advisor and Kensington Active
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Kensington is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Diversified and Kensington Active Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kensington Active 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 Kensington Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kensington Active has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Kensington Active go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Kensington Active
Assuming the 90 days horizon Fidelity Advisor is expected to generate 3.35 times less return on investment than Kensington Active. In addition to that, Fidelity Advisor is 1.83 times more volatile than Kensington Active Advantage. It trades about 0.06 of its total potential returns per unit of risk. Kensington Active Advantage is currently generating about 0.39 per unit of volatility. If you would invest 997.00 in Kensington Active Advantage on September 4, 2024 and sell it today you would earn a total of 33.00 from holding Kensington Active Advantage or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fidelity Advisor Diversified vs. Kensington Active Advantage
Performance |
| Timeline |
| Fidelity Advisor Div |
| Kensington Active |
Fidelity Advisor and Kensington Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Kensington Active
The main advantage of trading using opposite Fidelity Advisor and Kensington Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Kensington Active 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 Kensington Active will offset losses from the drop in Kensington Active'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 |
| Kensington Active vs. Kensington Defender Institutional | Kensington Active vs. Kensington Active Advantage | Kensington Active vs. Kensington Dynamic Growth | Kensington Active vs. Kensington Dynamic Growth |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |