Correlation Between ATT and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both ATT 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 ATT and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Fidelity Advisor Strategic, you can compare the effects of market volatilities on ATT 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 ATT with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Fidelity Advisor.
Diversification Opportunities for ATT and Fidelity Advisor
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATT and Fidelity is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Fidelity Advisor Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Str and ATT 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 ATT Inc 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 Str has no effect on the direction of ATT i.e., ATT and Fidelity Advisor go up and down completely randomly.
Pair Corralation between ATT and Fidelity Advisor
Taking into account the 90-day investment horizon ATT Inc is expected to generate 6.05 times more return on investment than Fidelity Advisor. However, ATT is 6.05 times more volatile than Fidelity Advisor Strategic. It trades about 0.16 of its potential returns per unit of risk. Fidelity Advisor Strategic is currently generating about 0.11 per unit of risk. If you would invest 2,254 in ATT Inc on November 3, 2024 and sell it today you would earn a total of 119.00 from holding ATT Inc or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
ATT Inc vs. Fidelity Advisor Strategic
Performance |
| Timeline |
| ATT Inc |
| Fidelity Advisor Str |
ATT and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Fidelity Advisor
The main advantage of trading using opposite ATT and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT 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.The idea behind ATT Inc and Fidelity Advisor Strategic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Fidelity Advisor vs. Alpsalerian Energy Infrastructure | Fidelity Advisor vs. Clearbridge Energy Mlp | Fidelity Advisor vs. Thrivent Natural Resources | Fidelity Advisor vs. Tortoise Energy Independence |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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