Correlation Between Fidelity Advantage and Fidelity All

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

By analyzing existing cross correlation between Fidelity Advantage Bitcoin and Fidelity All in One Balanced, you can compare the effects of market volatilities on Fidelity Advantage and Fidelity All 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 Advantage with a short position of Fidelity All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advantage and Fidelity All.

Diversification Opportunities for Fidelity Advantage and Fidelity All

0.93

Correlation Coefficient

Fidelity Advantage  Fidelity All

Almost no diversification

The 3 months correlation between Fidelity and Fidelity is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advantage Bitcoin and Fidelity All in One Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity All in and Fidelity Advantage 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 Advantage Bitcoin are associated (or correlated) with Fidelity All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity All in has no effect on the direction of Fidelity Advantage i.e., Fidelity Advantage and Fidelity All go up and down completely randomly.

Pair Corralation between Fidelity Advantage and Fidelity All

Assuming the 90 days trading horizon Fidelity Advantage Bitcoin is expected to generate 8.08 times more return on investment than Fidelity All. However, Fidelity Advantage is 8.08 times more volatile than Fidelity All in One Balanced. It trades about 0.28 of its potential returns per unit of risk. Fidelity All in One Balanced is currently generating about 0.31 per unit of risk. If you would invest  2,512  in Fidelity Advantage Bitcoin on September 5, 2024 and sell it today you would earn a total of  1,942  from holding Fidelity Advantage Bitcoin or generate 77.31% return on investment over 90 days.

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

Fidelity Advantage Bitcoin  vs.  Fidelity All in One Balanced

Fidelity Advantage

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advantage Bitcoin are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Fidelity Advantage displayed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity All in

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity All in One Balanced are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Fidelity All may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Fidelity Advantage and Fidelity All

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

The idea behind Fidelity Advantage Bitcoin and Fidelity All in One Balanced 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 Transaction History module to view history of all your transactions and understand their impact on performance.