Correlation Between Western Asset and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Municipal and Fidelity Advisor Leveraged, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Fidelity Advisor.
Diversification Opportunities for Western Asset and Fidelity Advisor
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Fidelity is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Fidelity Advisor Leveraged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Lev and Western Asset 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 Western Asset Municipal 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 Lev has no effect on the direction of Western Asset i.e., Western Asset and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Western Asset and Fidelity Advisor
Assuming the 90 days horizon Western Asset Municipal is expected to under-perform the Fidelity Advisor. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Municipal is 9.14 times less risky than Fidelity Advisor. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Fidelity Advisor Leveraged is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,967 in Fidelity Advisor Leveraged on September 13, 2024 and sell it today you would earn a total of 272.00 from holding Fidelity Advisor Leveraged or generate 6.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Fidelity Advisor Leveraged
Performance |
| Timeline |
| Western Asset Municipal |
| Fidelity Advisor Lev |
Western Asset and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Fidelity Advisor
The main advantage of trading using opposite Western Asset and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
| Fidelity Advisor vs. Fidelity Freedom 2015 | Fidelity Advisor vs. Fidelity Puritan Fund | Fidelity Advisor vs. Fidelity Puritan Fund | Fidelity Advisor vs. Fidelity Pennsylvania Municipal |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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