Correlation Between Fidelity Sustainable and Fidelity Advisor

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

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

Diversification Opportunities for Fidelity Sustainable and Fidelity Advisor

0.93

Correlation Coefficient

Fidelity Sustainable  Fidelity Advisor

Almost no diversification

The 3 months correlation between Fidelity and Fidelity is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sustainable Target and Fidelity Advisor Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Div and Fidelity Sustainable 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 Fidelity Sustainable Target 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 Div has no effect on the direction of Fidelity Sustainable i.e., Fidelity Sustainable and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Fidelity Sustainable and Fidelity Advisor

Assuming the 90 days horizon Fidelity Sustainable Target is expected to generate 0.79 times more return on investment than Fidelity Advisor. However, Fidelity Sustainable Target is 1.26 times less risky than Fidelity Advisor. It trades about 0.26 of its potential returns per unit of risk. Fidelity Advisor Diversified is currently generating about 0.1 per unit of risk. If you would invest  1,035  in Fidelity Sustainable Target on May 3, 2025 and sell it today you would earn a total of  97.00  from holding Fidelity Sustainable Target or generate 9.37% return on investment over 90 days.

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

Fidelity Sustainable Target  vs.  Fidelity Advisor Diversified

Fidelity Sustainable

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sustainable Target are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Sustainable may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Fidelity Advisor Div

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Diversified are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Sustainable and Fidelity Advisor

The main advantage of trading using opposite Fidelity Sustainable and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Sustainable 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 Fidelity Sustainable Target and Fidelity Advisor Diversified 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.