Correlation Between Fidelity Advisor and Eaton Vance

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

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

Diversification Opportunities for Fidelity Advisor and Eaton Vance

-0.48

Correlation Coefficient

Fidelity Advisor  Eaton Vance

Very good diversification

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

Pair Corralation between Fidelity Advisor and Eaton Vance

Assuming the 90 days horizon Fidelity Advisor Gold is expected to under-perform the Eaton Vance. In addition to that, Fidelity Advisor is 10.59 times more volatile than Eaton Vance Income. It trades about -0.31 of its total potential returns per unit of risk. Eaton Vance Income is currently generating about -0.22 per unit of volatility. If you would invest  523.00  in Eaton Vance Income on September 23, 2024 and sell it today you would lose (4.00) from holding Eaton Vance Income or give up 0.76% of portfolio value over 90 days.

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

Fidelity Advisor Gold  vs.  Eaton Vance Income

Fidelity Advisor Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Advisor Gold has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly 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 fund investors.

Eaton Vance Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Eaton Vance 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 Eaton Vance

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

The idea behind Fidelity Advisor Gold and Eaton Vance Income 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.