Correlation Between Fidelity Advisor and Dunham Focused

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

By analyzing existing cross correlation between Fidelity Advisor Technology and Dunham Focused Large, you can compare the effects of market volatilities on Fidelity Advisor and Dunham Focused 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 Dunham Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Dunham Focused.

Diversification Opportunities for Fidelity Advisor and Dunham Focused

0.88

Correlation Coefficient

Fidelity Advisor  Dunham Focused

Very poor diversification

The 3 months correlation between Fidelity and Dunham is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Technology and Dunham Focused Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Focused Large 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 Technology are associated (or correlated) with Dunham Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Focused Large has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Dunham Focused go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Dunham Focused

Assuming the 90 days horizon Fidelity Advisor Technology is expected to generate 0.97 times more return on investment than Dunham Focused. However, Fidelity Advisor Technology is 1.03 times less risky than Dunham Focused. It trades about 0.02 of its potential returns per unit of risk. Dunham Focused Large is currently generating about -0.02 per unit of risk. If you would invest  12,014  in Fidelity Advisor Technology on September 29, 2024 and sell it today you would earn a total of  179.00  from holding Fidelity Advisor Technology or generate 1.49% return on investment over 90 days.

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

Fidelity Advisor Technology  vs.  Dunham Focused Large

Fidelity Advisor Tec

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Technology are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dunham Focused Large

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Dunham Focused Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Dunham Focused 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 Dunham Focused

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

The idea behind Fidelity Advisor Technology and Dunham Focused Large 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.