Correlation Between James Alpha and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both James Alpha and Fidelity Advisor 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 James Alpha and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Alpha Managed and Fidelity Advisor Energy, you can compare the effects of market volatilities on James Alpha and Fidelity Advisor 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 James Alpha with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Alpha and Fidelity Advisor.
Diversification Opportunities for James Alpha and Fidelity Advisor
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between James and Fidelity is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding James Alpha Managed and Fidelity Advisor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Energy and James Alpha 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 James Alpha Managed are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Energy has no effect on the direction of James Alpha i.e., James Alpha and Fidelity Advisor go up and down completely randomly.
Pair Corralation between James Alpha and Fidelity Advisor
Assuming the 90 days horizon James Alpha is expected to generate 3.95 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, James Alpha Managed is 2.01 times less risky than Fidelity Advisor. It trades about 0.14 of its potential returns per unit of risk. Fidelity Advisor Energy is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 4,752 in Fidelity Advisor Energy on August 30, 2024 and sell it today you would earn a total of 321.00 from holding Fidelity Advisor Energy or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
James Alpha Managed vs. Fidelity Advisor Energy
Performance |
| Timeline |
| James Alpha Managed |
| Fidelity Advisor Energy |
James Alpha and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Alpha and Fidelity Advisor
The main advantage of trading using opposite James Alpha and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Alpha position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.| James Alpha vs. Energy Services Fund | James Alpha vs. Hennessy Bp Energy | James Alpha vs. Guinness Atkinson Alternative | James Alpha vs. Victory Global Natural |
| Fidelity Advisor vs. Qs Large Cap | Fidelity Advisor vs. Touchstone Large Cap | Fidelity Advisor vs. Fidelity Series 1000 | Fidelity Advisor vs. Qs Large Cap |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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