Correlation Between NYSE Composite and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Fidelity Advisor Freedom, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fidelity Advisor.
Diversification Opportunities for NYSE Composite and Fidelity Advisor
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Fidelity is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fidelity Advisor Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Freedom and NYSE Composite 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 NYSE Composite 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 Freedom has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fidelity Advisor go up and down completely randomly.
Pair Corralation between NYSE Composite and Fidelity Advisor
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.21 times more return on investment than Fidelity Advisor. However, NYSE Composite is 2.21 times more volatile than Fidelity Advisor Freedom. It trades about 0.24 of its potential returns per unit of risk. Fidelity Advisor Freedom is currently generating about -0.04 per unit of risk. If you would invest 1,945,627 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 66,718 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Fidelity Advisor Freedom
Performance |
| Timeline |
NYSE Composite and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Advisor Freedom
Pair trading matchups for Fidelity Advisor
Pair Trading with NYSE Composite and Fidelity Advisor
The main advantage of trading using opposite NYSE Composite and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| Fidelity Advisor vs. Fidelity Freedom 2015 | Fidelity Advisor vs. Fidelity Puritan Fund | Fidelity Advisor vs. Fidelity Puritan Fund | Fidelity Advisor vs. Fidelity Pennsylvania Municipal |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |