Correlation Between Voya Prime and Fidelity Advisor

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

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

Diversification Opportunities for Voya Prime and Fidelity Advisor

-0.38

Correlation Coefficient

Voya Prime  Fidelity Advisor

Very good diversification

The 3 months correlation between Voya and Fidelity is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Voya Prime Rate and Fidelity Advisor Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Freedom and Voya Prime 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 Voya Prime Rate 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 Freedom has no effect on the direction of Voya Prime i.e., Voya Prime and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Voya Prime and Fidelity Advisor

Assuming the 90 days horizon Voya Prime Rate is expected to generate 1.23 times more return on investment than Fidelity Advisor. However, Voya Prime is 1.23 times more volatile than Fidelity Advisor Freedom. It trades about 0.6 of its potential returns per unit of risk. Fidelity Advisor Freedom is currently generating about 0.06 per unit of risk. If you would invest  737.00  in Voya Prime Rate on August 31, 2024 and sell it today you would earn a total of  40.00  from holding Voya Prime Rate or generate 5.43% return on investment over 90 days.

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

Voya Prime Rate  vs.  Fidelity Advisor Freedom

Voya Prime Rate

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Prime Rate are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Voya Prime may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Fidelity Advisor Freedom

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Freedom are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental 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 Voya Prime and Fidelity Advisor

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

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.