Correlation Between Strategic Allocation and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Strategic Allocation 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 Strategic Allocation and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Allocation Aggressive and Fidelity Advisor Sustainable, you can compare the effects of market volatilities on Strategic Allocation 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 Strategic Allocation with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Allocation and Fidelity Advisor.
Diversification Opportunities for Strategic Allocation and Fidelity Advisor
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strategic and Fidelity is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Allocation Aggressiv and Fidelity Advisor Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Sus and Strategic Allocation 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 Strategic Allocation Aggressive 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 Sus has no effect on the direction of Strategic Allocation i.e., Strategic Allocation and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Strategic Allocation and Fidelity Advisor
Assuming the 90 days horizon Strategic Allocation Aggressive is expected to generate 1.02 times more return on investment than Fidelity Advisor. However, Strategic Allocation is 1.02 times more volatile than Fidelity Advisor Sustainable. It trades about 0.12 of its potential returns per unit of risk. Fidelity Advisor Sustainable is currently generating about 0.11 per unit of risk. If you would invest 694.00 in Strategic Allocation Aggressive on September 12, 2024 and sell it today you would earn a total of 179.00 from holding Strategic Allocation Aggressive or generate 25.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Allocation Aggressiv vs. Fidelity Advisor Sustainable
Performance |
| Timeline |
| Strategic Allocation |
| Fidelity Advisor Sus |
Strategic Allocation and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Allocation and Fidelity Advisor
The main advantage of trading using opposite Strategic Allocation and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Allocation 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 Strategic Allocation Aggressive and Fidelity Advisor Sustainable 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. Strategic Allocation Servative | Fidelity Advisor vs. Strategic Allocation Aggressive | Fidelity Advisor vs. Value Fund Investor | Fidelity Advisor vs. International Growth Fund |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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