Correlation Between Ethereum and Fidelity Advisor

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

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

Diversification Opportunities for Ethereum and Fidelity Advisor

0.19

Correlation Coefficient

Ethereum  Fidelity Advisor

Average diversification

The 3 months correlation between Ethereum and Fidelity is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Fidelity Advisor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Energy and Ethereum 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 Ethereum 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 Energy has no effect on the direction of Ethereum i.e., Ethereum and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Ethereum and Fidelity Advisor

Assuming the 90 days trading horizon Ethereum is expected to under-perform the Fidelity Advisor. In addition to that, Ethereum is 3.0 times more volatile than Fidelity Advisor Energy. It trades about -0.2 of its total potential returns per unit of risk. Fidelity Advisor Energy is currently generating about 0.09 per unit of volatility. If you would invest  3,894  in Fidelity Advisor Energy on December 23, 2024 and sell it today you would earn a total of  261.00  from holding Fidelity Advisor Energy or generate 6.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

Ethereum  vs.  Fidelity Advisor Energy

Ethereum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ethereum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Ethereum shareholders.

Fidelity Advisor Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Energy are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Fidelity Advisor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ethereum and Fidelity Advisor

The main advantage of trading using opposite Ethereum and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum 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 Ethereum and Fidelity Advisor Energy 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.