Correlation Between Fidelity Growth and Fidelity Advisor

Can any of the company-specific risk be diversified away by investing in both Fidelity 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 Fidelity 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 Fidelity Growth Strategies and Fidelity Advisor Growth, you can compare the effects of market volatilities on Fidelity 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 Fidelity Growth with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Growth and Fidelity Advisor.

Diversification Opportunities for Fidelity Growth and Fidelity Advisor

0.95

Correlation Coefficient

Fidelity Growth  Fidelity Advisor

Almost no diversification

The 3 months correlation between Fidelity and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Growth Strategies and Fidelity Advisor Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Growth and Fidelity 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 Fidelity Growth Strategies 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 Growth has no effect on the direction of Fidelity Growth i.e., Fidelity Growth and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Fidelity Growth and Fidelity Advisor

Assuming the 90 days horizon Fidelity Growth Strategies is expected to generate 1.12 times more return on investment than Fidelity Advisor. However, Fidelity Growth is 1.12 times more volatile than Fidelity Advisor Growth. It trades about 0.24 of its potential returns per unit of risk. Fidelity Advisor Growth is currently generating about 0.24 per unit of risk. If you would invest  6,383  in Fidelity Growth Strategies on September 13, 2024 and sell it today you would earn a total of  1,159  from holding Fidelity Growth Strategies or generate 18.16% return on investment over 90 days.

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

Fidelity Growth Strategies  vs.  Fidelity Advisor Growth

Fidelity Growth Stra

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Growth Strategies are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Fidelity Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Advisor Growth

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Growth are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Fidelity Advisor showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity Growth and Fidelity Advisor

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

The idea behind Fidelity Growth Strategies and Fidelity Advisor Growth 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.