Correlation Between Fidelity Advisor and Fidelity Sai

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

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

Diversification Opportunities for Fidelity Advisor and Fidelity Sai

-0.81

Correlation Coefficient

Fidelity Advisor  Fidelity Sai

Pay attention - limited upside

The 3 months correlation between Fidelity and Fidelity is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Growth and Fidelity Sai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Interna 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 Growth are associated (or correlated) with Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Interna has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Fidelity Sai go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Fidelity Sai

Assuming the 90 days horizon Fidelity Advisor Growth is expected to generate 1.28 times more return on investment than Fidelity Sai. However, Fidelity Advisor is 1.28 times more volatile than Fidelity Sai International. It trades about 0.37 of its potential returns per unit of risk. Fidelity Sai International is currently generating about -0.08 per unit of risk. If you would invest  17,103  in Fidelity Advisor Growth on September 18, 2024 and sell it today you would earn a total of  1,210  from holding Fidelity Advisor Growth or generate 7.07% return on investment over 90 days.

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

Fidelity Advisor Growth  vs.  Fidelity Sai International

Fidelity Advisor Growth

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Growth are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Advisor showed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Sai Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Sai International has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Fidelity Advisor and Fidelity Sai

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

The idea behind Fidelity Advisor Growth and Fidelity Sai International 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.