Correlation Between Fidelity Advantage and Global X

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Can any of the company-specific risk be diversified away by investing in both Fidelity Advantage and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advantage Ether and Global X Marijuana, you can compare the effects of market volatilities on Fidelity Advantage and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advantage and Global X.

Diversification Opportunities for Fidelity Advantage and Global X

FidelityGlobalDiversified AwayFidelityGlobalDiversified Away100%
-0.75
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Fidelity and Global is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advantage Ether and Global X Marijuana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Marijuana 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 Ether are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Marijuana has no effect on the direction of Fidelity Advantage i.e., Fidelity Advantage and Global X go up and down completely randomly.

Pair Corralation between Fidelity Advantage and Global X

Assuming the 90 days trading horizon Fidelity Advantage Ether is expected to generate 3.61 times more return on investment than Global X. However, Fidelity Advantage is 3.61 times more volatile than Global X Marijuana. It trades about 0.14 of its potential returns per unit of risk. Global X Marijuana is currently generating about -0.18 per unit of risk. If you would invest  4,667  in Fidelity Advantage Ether on September 25, 2024 and sell it today you would earn a total of  1,829  from holding Fidelity Advantage Ether or generate 39.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Fidelity Advantage Ether  vs.  Global X Marijuana

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 0204060
JavaScript chart by amCharts 3.21.15FETH HMMJ-U
       Timeline  
Fidelity Advantage Ether 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advantage Ether are ranked lower than 11 (%) 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec45505560657075
Global X Marijuana 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Global X Marijuana has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Etf's primary indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec6.46.66.877.27.47.6

Fidelity Advantage and Global X Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-13.47-10.09-6.71-3.33-0.05643.457.0710.714.3317.95 0.050.100.150.20
JavaScript chart by amCharts 3.21.15FETH HMMJ-U
       Returns  

Pair Trading with Fidelity Advantage and Global X

The main advantage of trading using opposite Fidelity Advantage and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advantage position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.
The idea behind Fidelity Advantage Ether and Global X Marijuana 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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