Correlation Between Nasdaq 100 and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 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 Nasdaq 100 and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Fidelity Advisor Biotechnology, you can compare the effects of market volatilities on Nasdaq 100 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 Nasdaq 100 with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Fidelity Advisor.
Diversification Opportunities for Nasdaq 100 and Fidelity Advisor
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nasdaq and Fidelity is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Fidelity Advisor Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Bio and Nasdaq 100 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 Nasdaq 100 2x Strategy 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 Bio has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Fidelity Advisor
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 1.01 times more return on investment than Fidelity Advisor. However, Nasdaq 100 is 1.01 times more volatile than Fidelity Advisor Biotechnology. It trades about 0.06 of its potential returns per unit of risk. Fidelity Advisor Biotechnology is currently generating about -0.23 per unit of risk. If you would invest 42,615 in Nasdaq 100 2x Strategy on September 12, 2024 and sell it today you would earn a total of 802.00 from holding Nasdaq 100 2x Strategy or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Fidelity Advisor Biotechnology
Performance |
| Timeline |
| Nasdaq 100 2x |
| Fidelity Advisor Bio |
Nasdaq 100 and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Fidelity Advisor
The main advantage of trading using opposite Nasdaq 100 and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 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.| Nasdaq 100 vs. Ambrus Core Bond | Nasdaq 100 vs. Pace High Yield | Nasdaq 100 vs. Franklin High Yield | Nasdaq 100 vs. The National Tax Free |
| Fidelity Advisor vs. Dreyfusstandish Global Fixed | Fidelity Advisor vs. Franklin High Yield | Fidelity Advisor vs. California Bond Fund | Fidelity Advisor vs. Touchstone Premium Yield |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |