Correlation Between Fidelity Advisor and Fidelity Climate

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

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

Diversification Opportunities for Fidelity Advisor and Fidelity Climate

0.8

Correlation Coefficient

Fidelity Advisor  Fidelity Climate

Very poor diversification

The 3 months correlation between Fidelity and Fidelity is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Sumer and Fidelity Climate Action in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Climate Action and Fidelity Advisor 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 Fidelity Advisor Sumer are associated (or correlated) with Fidelity Climate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Climate Action has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Fidelity Climate go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Fidelity Climate

Assuming the 90 days horizon Fidelity Advisor Sumer is expected to generate 1.56 times more return on investment than Fidelity Climate. However, Fidelity Advisor is 1.56 times more volatile than Fidelity Climate Action. It trades about 0.11 of its potential returns per unit of risk. Fidelity Climate Action is currently generating about 0.08 per unit of risk. If you would invest  4,062  in Fidelity Advisor Sumer on October 27, 2024 and sell it today you would earn a total of  366.00  from holding Fidelity Advisor Sumer or generate 9.01% return on investment over 90 days.

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

Fidelity Advisor Sumer  vs.  Fidelity Climate Action

Fidelity Advisor Sumer

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Sumer are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Advisor may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Fidelity Climate Action

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Climate Action are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Fidelity Climate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Advisor and Fidelity Climate

The main advantage of trading using opposite Fidelity Advisor and Fidelity Climate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Fidelity Climate 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 Climate will offset losses from the drop in Fidelity Climate's long position.

The idea behind Fidelity Advisor Sumer and Fidelity Climate Action 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.