Correlation Between Guidepath Multi and Fidelity Advisor

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

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

Diversification Opportunities for Guidepath Multi and Fidelity Advisor

0.86

Correlation Coefficient

Guidepath Multi  Fidelity Advisor

Very poor diversification

The 3 months correlation between Guidepath and Fidelity is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Multi Asset Income and Fidelity Advisor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Energy and Guidepath Multi 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 Guidepath Multi Asset Income 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 Energy has no effect on the direction of Guidepath Multi i.e., Guidepath Multi and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Guidepath Multi and Fidelity Advisor

Assuming the 90 days horizon Guidepath Multi is expected to generate 2.18 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Guidepath Multi Asset Income is 2.97 times less risky than Fidelity Advisor. It trades about 0.2 of its potential returns per unit of risk. Fidelity Advisor Energy is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  4,320  in Fidelity Advisor Energy on May 6, 2025 and sell it today you would earn a total of  476.00  from holding Fidelity Advisor Energy or generate 11.02% return on investment over 90 days.

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

Guidepath Multi Asset Income  vs.  Fidelity Advisor Energy

Guidepath Multi Asset

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Multi Asset Income are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Guidepath Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Advisor Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Energy are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Advisor may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Guidepath Multi and Fidelity Advisor

The main advantage of trading using opposite Guidepath Multi and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidepath Multi 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 Guidepath Multi Asset Income and Fidelity Advisor Energy 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.