Correlation Between Fidelity Advisor and Horizon Funds

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

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

Diversification Opportunities for Fidelity Advisor and Horizon Funds

0.98

Correlation Coefficient

Fidelity Advisor  Horizon Funds

Almost no diversification

The 3 months correlation between Fidelity and Horizon is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Strategic and Horizon Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Funds and Fidelity Advisor 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 Advisor Strategic are associated (or correlated) with Horizon Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Funds has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Horizon Funds go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Horizon Funds

Assuming the 90 days horizon Fidelity Advisor is expected to generate 1.11 times less return on investment than Horizon Funds. But when comparing it to its historical volatility, Fidelity Advisor Strategic is 1.11 times less risky than Horizon Funds. It trades about 0.23 of its potential returns per unit of risk. Horizon Funds is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  4,539  in Horizon Funds on June 29, 2025 and sell it today you would earn a total of  121.00  from holding Horizon Funds or generate 2.67% return on investment over 90 days.

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

Fidelity Advisor Strategic  vs.  Horizon Funds

Fidelity Advisor Str

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Strategic are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Horizon Funds

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Funds are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Horizon Funds 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 Advisor and Horizon Funds

The main advantage of trading using opposite Fidelity Advisor and Horizon Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Horizon Funds 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 Horizon Funds will offset losses from the drop in Horizon Funds' long position.

The idea behind Fidelity Advisor Strategic and Horizon Funds 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.