Correlation Between State Street and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both State Street 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 State Street and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Target and Fidelity Advisor Financial, you can compare the effects of market volatilities on State Street 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 State Street with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Fidelity Advisor.
Diversification Opportunities for State Street and Fidelity Advisor
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between State and Fidelity is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding State Street Target 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 State Street 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 State Street Target 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 State Street i.e., State Street and Fidelity Advisor go up and down completely randomly.
Pair Corralation between State Street and Fidelity Advisor
Assuming the 90 days horizon State Street is expected to generate 3.86 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, State Street Target is 3.04 times less risky than Fidelity Advisor. It trades about 0.14 of its potential returns per unit of risk. Fidelity Advisor Financial is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,126 in Fidelity Advisor Financial on September 1, 2024 and sell it today you would earn a total of 910.00 from holding Fidelity Advisor Financial or generate 29.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
State Street Target vs. Fidelity Advisor Financial
Performance |
| Timeline |
| State Street Target |
| Fidelity Advisor Fin |
State Street and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Fidelity Advisor
The main advantage of trading using opposite State Street and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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.| State Street vs. State Street Target | State Street vs. State Street Target | State Street vs. Ssga International Stock | State Street vs. State Street Target |
| Fidelity Advisor vs. Goehring Rozencwajg Resources | Fidelity Advisor vs. Clearbridge Energy Mlp | Fidelity Advisor vs. Fidelity Advisor Energy | Fidelity Advisor vs. Hennessy Bp Energy |
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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