Correlation Between Nationwide Bailard and Fidelity Advisor

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

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

Diversification Opportunities for Nationwide Bailard and Fidelity Advisor

-0.7

Correlation Coefficient

Nationwide Bailard  Fidelity Advisor

Excellent diversification

The 3 months correlation between Nationwide and Fidelity is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Bailard Internation and Fidelity Advisor Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Fin and Nationwide Bailard 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 Nationwide Bailard International 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 Fin has no effect on the direction of Nationwide Bailard i.e., Nationwide Bailard and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Nationwide Bailard and Fidelity Advisor

Assuming the 90 days horizon Nationwide Bailard is expected to generate 2.71 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Nationwide Bailard International is 1.37 times less risky than Fidelity Advisor. It trades about 0.06 of its potential returns per unit of risk. Fidelity Advisor Financial is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,606  in Fidelity Advisor Financial on September 12, 2024 and sell it today you would earn a total of  1,329  from holding Fidelity Advisor Financial or generate 51.0% return on investment over 90 days.

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

Nationwide Bailard Internation  vs.  Fidelity Advisor Financial

Nationwide Bailard

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nationwide Bailard International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking indicators, Nationwide Bailard is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Advisor Fin

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Financial are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Fidelity Advisor showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nationwide Bailard and Fidelity Advisor

The main advantage of trading using opposite Nationwide Bailard and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Bailard 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 Nationwide Bailard International and Fidelity Advisor Financial 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..