Correlation Between Clearbridge Energy and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Clearbridge Energy 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 Clearbridge Energy and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Energy Mlp and Fidelity Advisor Financial, you can compare the effects of market volatilities on Clearbridge Energy 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 Clearbridge Energy with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Energy and Fidelity Advisor.
Diversification Opportunities for Clearbridge Energy and Fidelity Advisor
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clearbridge and Fidelity is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp 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 Clearbridge Energy 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 Clearbridge Energy Mlp 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 Clearbridge Energy i.e., Clearbridge Energy and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Clearbridge Energy and Fidelity Advisor
Assuming the 90 days horizon Clearbridge Energy Mlp is expected to generate 0.61 times more return on investment than Fidelity Advisor. However, Clearbridge Energy Mlp is 1.64 times less risky than Fidelity Advisor. It trades about 0.65 of its potential returns per unit of risk. Fidelity Advisor Financial is currently generating about 0.31 per unit of risk. If you would invest 4,825 in Clearbridge Energy Mlp on September 3, 2024 and sell it today you would earn a total of 757.00 from holding Clearbridge Energy Mlp or generate 15.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Energy Mlp vs. Fidelity Advisor Financial
Performance |
| Timeline |
| Clearbridge Energy Mlp |
| Fidelity Advisor Fin |
Clearbridge Energy and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Energy and Fidelity Advisor
The main advantage of trading using opposite Clearbridge Energy and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy 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.| Clearbridge Energy vs. Energy Basic Materials | Clearbridge Energy vs. Tortoise Energy Independence | Clearbridge Energy vs. Fidelity Advisor Energy | Clearbridge Energy vs. Dreyfus Natural Resources |
| Fidelity Advisor vs. Firsthand Alternative Energy | Fidelity Advisor vs. Energy Basic Materials | Fidelity Advisor vs. Clearbridge Energy Mlp | 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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