Correlation Between Coca Cola and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Coca Cola 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 Coca Cola and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and Fidelity Advisor Balanced, you can compare the effects of market volatilities on Coca Cola 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 Coca Cola with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Fidelity Advisor.
Diversification Opportunities for Coca Cola and Fidelity Advisor
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coca and Fidelity is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Fidelity Advisor Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Balanced and Coca Cola 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 The Coca Cola 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 Balanced has no effect on the direction of Coca Cola i.e., Coca Cola and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Coca Cola and Fidelity Advisor
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Fidelity Advisor. In addition to that, Coca Cola is 23.31 times more volatile than Fidelity Advisor Balanced. It trades about -0.31 of its total potential returns per unit of risk. Fidelity Advisor Balanced is currently generating about 0.17 per unit of volatility. If you would invest 2,883 in Fidelity Advisor Balanced on August 24, 2024 and sell it today you would earn a total of 4.00 from holding Fidelity Advisor Balanced or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Coca Cola vs. Fidelity Advisor Balanced
Performance |
| Timeline |
| Coca Cola |
| Fidelity Advisor Balanced |
Coca Cola and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Fidelity Advisor
The main advantage of trading using opposite Coca Cola and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola 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.| Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. Eshallgo Class A | Coca Cola vs. Amtech Systems | Coca Cola vs. Gold Fields Ltd |
| Fidelity Advisor vs. Fidelity Advisor Balanced | Fidelity Advisor vs. Fidelity Advisor Balanced | Fidelity Advisor vs. Fidelity Advisor Growth | Fidelity Advisor vs. Fidelity Advisor Equity |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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