Correlation Between Fidelity Advisor and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Emerging Markets 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 Emerging Markets 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 Emerging Markets Fund, you can compare the effects of market volatilities on Fidelity Advisor and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Emerging Markets.
Diversification Opportunities for Fidelity Advisor and Emerging Markets
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Emerging is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Diversified and Emerging Markets Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Emerging Markets go up and down completely randomly.
Pair Corralation between Fidelity Advisor and Emerging Markets
Assuming the 90 days horizon Fidelity Advisor Diversified is expected to generate 0.98 times more return on investment than Emerging Markets. However, Fidelity Advisor Diversified is 1.02 times less risky than Emerging Markets. It trades about 0.05 of its potential returns per unit of risk. Emerging Markets Fund is currently generating about 0.03 per unit of risk. If you would invest 2,524 in Fidelity Advisor Diversified on August 25, 2024 and sell it today you would earn a total of 223.00 from holding Fidelity Advisor Diversified or generate 8.84% 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. Emerging Markets Fund
Performance |
| Timeline |
| Fidelity Advisor Div |
| Emerging Markets |
Fidelity Advisor and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and Emerging Markets
The main advantage of trading using opposite Fidelity Advisor and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' 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 |
| Emerging Markets vs. Pioneer Diversified High | Emerging Markets vs. Calvert Conservative Allocation | Emerging Markets vs. Fidelity Advisor Diversified | Emerging Markets vs. Huber Capital Diversified |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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