Correlation Between Aggressive Growth and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Aggressive Growth 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 Aggressive Growth and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aggressive Growth Fund and Fidelity Advisor New, you can compare the effects of market volatilities on Aggressive Growth 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 Aggressive Growth with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aggressive Growth and Fidelity Advisor.
Diversification Opportunities for Aggressive Growth and Fidelity Advisor
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aggressive and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Fund and Fidelity Advisor New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor New and Aggressive Growth 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 Aggressive Growth 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 New has no effect on the direction of Aggressive Growth i.e., Aggressive Growth and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Aggressive Growth and Fidelity Advisor
Assuming the 90 days horizon Aggressive Growth Fund is expected to under-perform the Fidelity Advisor. In addition to that, Aggressive Growth is 1.26 times more volatile than Fidelity Advisor New. It trades about -0.21 of its total potential returns per unit of risk. Fidelity Advisor New is currently generating about -0.21 per unit of volatility. If you would invest 3,772 in Fidelity Advisor New on January 27, 2024 and sell it today you would lose (155.00) from holding Fidelity Advisor New or give up 4.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aggressive Growth Fund vs. Fidelity Advisor New
Performance |
| Timeline |
| Aggressive Growth |
| Fidelity Advisor New |
Aggressive Growth and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aggressive Growth and Fidelity Advisor
The main advantage of trading using opposite Aggressive Growth and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aggressive Growth 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.| Aggressive Growth vs. Capital Growth Fund | Aggressive Growth vs. Emerging Markets Fund | Aggressive Growth vs. High Income Fund | Aggressive Growth vs. International Fund International |
| Fidelity Advisor vs. Fidelity Freedom 2015 | Fidelity Advisor vs. Fidelity Puritan Fund | Fidelity Advisor vs. Fidelity Pennsylvania Municipal | Fidelity Advisor vs. Fidelity Freedom Index |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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