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 Growth, 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 Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Growth 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 Growth 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 under-perform the Fidelity Advisor. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 2.08 times less risky than Fidelity Advisor. The index trades about -0.03 of its potential returns per unit of risk. The Fidelity Advisor Growth is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 20,150 in Fidelity Advisor Growth on November 3, 2024 and sell it today you would earn a total of 490.00 from holding Fidelity Advisor Growth or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
NYSE Composite vs. Fidelity Advisor Growth
Performance |
| Timeline |
NYSE Composite and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fidelity Advisor Growth
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. Arrow Electronics | NYSE Composite vs. Cirmaker Technology | NYSE Composite vs. Zhihu Inc ADR | NYSE Composite vs. Weibo Corp |
| Fidelity Advisor vs. Vy Goldman Sachs | Fidelity Advisor vs. Gabelli Gold Fund | Fidelity Advisor vs. James Balanced Golden | Fidelity Advisor vs. Sprott Gold 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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