Correlation Between Central Europe and Fidelity Advisor

Can any of the company-specific risk be diversified away by investing in both Central Europe 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 Central Europe and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Central Europe Russia and Fidelity Advisor Freedom, you can compare the effects of market volatilities on Central Europe 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 Central Europe with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Europe and Fidelity Advisor.

Diversification Opportunities for Central Europe and Fidelity Advisor

0.47

Correlation Coefficient

Central Europe  Fidelity Advisor

Very weak diversification

The 3 months correlation between Central and Fidelity is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Central Europe Russia and Fidelity Advisor Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Freedom and Central Europe 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 Central Europe Russia 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 Freedom has no effect on the direction of Central Europe i.e., Central Europe and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Central Europe and Fidelity Advisor

Considering the 90-day investment horizon Central Europe is expected to generate 1.83 times less return on investment than Fidelity Advisor. In addition to that, Central Europe is 2.64 times more volatile than Fidelity Advisor Freedom. It trades about 0.05 of its total potential returns per unit of risk. Fidelity Advisor Freedom is currently generating about 0.23 per unit of volatility. If you would invest  1,029  in Fidelity Advisor Freedom on May 7, 2025 and sell it today you would earn a total of  86.00  from holding Fidelity Advisor Freedom or generate 8.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Central Europe Russia  vs.  Fidelity Advisor Freedom

Central Europe Russia

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Central Europe Russia are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Central Europe is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Fidelity Advisor Freedom

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Freedom are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Fidelity Advisor may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Central Europe and Fidelity Advisor

The main advantage of trading using opposite Central Europe and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Europe 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 Central Europe Russia and Fidelity Advisor Freedom 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.

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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.