Correlation Between Fidelity Advisor and Nationwide Growth

Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Nationwide Growth 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 Nationwide Growth 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 Nationwide Growth Fund, you can compare the effects of market volatilities on Fidelity Advisor and Nationwide Growth 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 Nationwide Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Nationwide Growth.

Diversification Opportunities for Fidelity Advisor and Nationwide Growth

0.02

Correlation Coefficient

Fidelity Advisor  Nationwide Growth

Significant diversification

The 3 months correlation between Fidelity and Nationwide is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Gold and Nationwide Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Growth 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 Nationwide Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Growth has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Nationwide Growth go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Nationwide Growth

Assuming the 90 days horizon Fidelity Advisor Gold is expected to generate 1.7 times more return on investment than Nationwide Growth. However, Fidelity Advisor is 1.7 times more volatile than Nationwide Growth Fund. It trades about 0.11 of its potential returns per unit of risk. Nationwide Growth Fund is currently generating about -0.11 per unit of risk. If you would invest  2,617  in Fidelity Advisor Gold on December 1, 2024 and sell it today you would earn a total of  279.00  from holding Fidelity Advisor Gold or generate 10.66% return on investment over 90 days.

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

Fidelity Advisor Gold  vs.  Nationwide Growth Fund

Fidelity Advisor Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Gold are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Fidelity Advisor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nationwide Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nationwide Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic 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 Nationwide Growth

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

The idea behind Fidelity Advisor Gold and Nationwide Growth Fund 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.