Correlation Between Federated Prudent and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Federated Prudent 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 Federated Prudent and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Prudent Bear and Fidelity Advisor Financial, you can compare the effects of market volatilities on Federated Prudent 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 Federated Prudent with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Prudent and Fidelity Advisor.
Diversification Opportunities for Federated Prudent and Fidelity Advisor
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federated and Fidelity is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Federated Prudent Bear and Fidelity Advisor Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Fin and Federated Prudent 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 Federated Prudent Bear 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 Fin has no effect on the direction of Federated Prudent i.e., Federated Prudent and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Federated Prudent and Fidelity Advisor
Assuming the 90 days horizon Federated Prudent Bear is expected to under-perform the Fidelity Advisor. But the mutual fund apears to be less risky and, when comparing its historical volatility, Federated Prudent Bear is 1.51 times less risky than Fidelity Advisor. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Fidelity Advisor Financial is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,944 in Fidelity Advisor Financial on September 12, 2024 and sell it today you would lose (9.00) from holding Fidelity Advisor Financial or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Prudent Bear vs. Fidelity Advisor Financial
Performance |
| Timeline |
| Federated Prudent Bear |
| Fidelity Advisor Fin |
Federated Prudent and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Prudent and Fidelity Advisor
The main advantage of trading using opposite Federated Prudent and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Prudent 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.| Federated Prudent vs. Grizzly Short Fund | Federated Prudent vs. Inverse Sp 500 | Federated Prudent vs. HUMANA INC | Federated Prudent vs. Barloworld Ltd ADR |
| Fidelity Advisor vs. Oklahoma Municipal Fund | Fidelity Advisor vs. California High Yield Municipal | Fidelity Advisor vs. T Rowe Price | Fidelity Advisor vs. T Rowe Price |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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