Correlation Between Vest Large and Fidelity Advisor

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

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

Diversification Opportunities for Vest Large and Fidelity Advisor

-0.2

Correlation Coefficient

Vest Large  Fidelity Advisor

Good diversification

The 3 months correlation between Vest and Fidelity is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Vest Large Cap 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 Vest Large 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 Vest Large Cap 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 Vest Large i.e., Vest Large and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Vest Large and Fidelity Advisor

Assuming the 90 days horizon Vest Large is expected to generate 2.02 times less return on investment than Fidelity Advisor. In addition to that, Vest Large is 1.02 times more volatile than Fidelity Advisor Financial. It trades about 0.04 of its total potential returns per unit of risk. Fidelity Advisor Financial is currently generating about 0.09 per unit of volatility. If you would invest  3,076  in Fidelity Advisor Financial on October 8, 2024 and sell it today you would earn a total of  446.00  from holding Fidelity Advisor Financial or generate 14.5% return on investment over 90 days.

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

Vest Large Cap  vs.  Fidelity Advisor Financial

Vest Large Cap

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vest Large Cap are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Vest Large may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Fidelity Advisor Fin

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Financial are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong 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 Vest Large and Fidelity Advisor

The main advantage of trading using opposite Vest Large and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vest Large 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 Vest Large Cap 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.