Correlation Between Fidelity Advisor and Axs Thomson

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

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

Diversification Opportunities for Fidelity Advisor and Axs Thomson

0.48

Correlation Coefficient

Fidelity Advisor  Axs Thomson

Very weak diversification

The 3 months correlation between Fidelity and Axs is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Diversified and Axs Thomson Reuters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axs Thomson Reuters 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 Diversified are associated (or correlated) with Axs Thomson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axs Thomson Reuters has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Axs Thomson go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Axs Thomson

Assuming the 90 days horizon Fidelity Advisor is expected to generate 1.97 times less return on investment than Axs Thomson. But when comparing it to its historical volatility, Fidelity Advisor Diversified is 1.58 times less risky than Axs Thomson. It trades about 0.06 of its potential returns per unit of risk. Axs Thomson Reuters is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,441  in Axs Thomson Reuters on October 23, 2024 and sell it today you would earn a total of  1,132  from holding Axs Thomson Reuters or generate 78.56% return on investment over 90 days.

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

Fidelity Advisor Diversified  vs.  Axs Thomson Reuters

Fidelity Advisor Div

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Advisor Diversified has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Axs Thomson Reuters

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with Fidelity Advisor and Axs Thomson

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

The idea behind Fidelity Advisor Diversified and Axs Thomson Reuters 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.