Correlation Between Matthews Asian and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Matthews Asian 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 Matthews Asian and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matthews Asian Growth and Fidelity Advisor Emerging, you can compare the effects of market volatilities on Matthews Asian 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 Matthews Asian with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matthews Asian and Fidelity Advisor.
Diversification Opportunities for Matthews Asian and Fidelity Advisor
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Matthews and Fidelity is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Matthews Asian Growth and Fidelity Advisor Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Emerging and Matthews Asian 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 Matthews Asian Growth 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 Emerging has no effect on the direction of Matthews Asian i.e., Matthews Asian and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Matthews Asian and Fidelity Advisor
Assuming the 90 days horizon Matthews Asian is expected to generate 1.92 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Matthews Asian Growth is 1.46 times less risky than Fidelity Advisor. It trades about 0.07 of its potential returns per unit of risk. Fidelity Advisor Emerging is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,723 in Fidelity Advisor Emerging on September 3, 2024 and sell it today you would earn a total of 1,082 from holding Fidelity Advisor Emerging or generate 29.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matthews Asian Growth vs. Fidelity Advisor Emerging
Performance |
| Timeline |
| Matthews Asian Growth |
| Fidelity Advisor Emerging |
Matthews Asian and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matthews Asian and Fidelity Advisor
The main advantage of trading using opposite Matthews Asian and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matthews Asian 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.| Matthews Asian vs. Champlain Mid Cap | Matthews Asian vs. Tfa Alphagen Growth | Matthews Asian vs. T Rowe Price | Matthews Asian vs. L Abbett Growth |
| Fidelity Advisor vs. Matthews Asia Dividend | Fidelity Advisor vs. Wcm Focused International | Fidelity Advisor vs. Invesco Disciplined Equity | Fidelity Advisor vs. Matthews Asian 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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