Correlation Between Energy Focu and Fidelity Advisor

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

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

Diversification Opportunities for Energy Focu and Fidelity Advisor

-0.51

Correlation Coefficient

Energy Focu  Fidelity Advisor

Excellent diversification

The 3 months correlation between Energy and Fidelity is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Energy Focu and Fidelity Advisor Sumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Sumer and Energy Focu 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 Energy Focu 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 Sumer has no effect on the direction of Energy Focu i.e., Energy Focu and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Energy Focu and Fidelity Advisor

Given the investment horizon of 90 days Energy Focu is expected to generate 10.29 times more return on investment than Fidelity Advisor. However, Energy Focu is 10.29 times more volatile than Fidelity Advisor Sumer. It trades about 0.09 of its potential returns per unit of risk. Fidelity Advisor Sumer is currently generating about -0.17 per unit of risk. If you would invest  121.00  in Energy Focu on December 30, 2024 and sell it today you would earn a total of  64.00  from holding Energy Focu or generate 52.89% return on investment over 90 days.

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

Energy Focu  vs.  Fidelity Advisor Sumer

Energy Focu

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Energy Focu are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Energy Focu demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Advisor Sumer

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Advisor Sumer has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Energy Focu and Fidelity Advisor

The main advantage of trading using opposite Energy Focu and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Focu 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 Energy Focu and Fidelity Advisor Sumer 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..