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 Index Fund and Fidelity Advisor Growth, 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
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nasdaq and Fidelity is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Fidelity Advisor Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Growth 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 Index Fund 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 Growth 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 is expected to generate 1.52 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Nasdaq 100 Index Fund is 1.15 times less risky than Fidelity Advisor. It trades about 0.08 of its potential returns per unit of risk. Fidelity Advisor Growth is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10,301 in Fidelity Advisor Growth on November 9, 2024 and sell it today you would earn a total of 4,599 from holding Fidelity Advisor Growth or generate 44.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Fidelity Advisor Growth
Performance |
| Timeline |
| Nasdaq 100 Index |
| Fidelity Advisor Growth |
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. Hewitt Money Market | Nasdaq 100 vs. Vanguard Money Market | Nasdaq 100 vs. Aig Government Money | Nasdaq 100 vs. Voya Government Money |
| Fidelity Advisor vs. Ab Large Cap | Fidelity Advisor vs. Fidelity Large Cap | Fidelity Advisor vs. Blackrock Large Cap | Fidelity Advisor vs. Qs Large Cap |
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.
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