Correlation Between Fidelity Advisor and James Balanced:

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

Diversification Opportunities for Fidelity Advisor and James Balanced:

0.35

Correlation Coefficient

Fidelity Advisor  James Balanced:

Weak diversification

The 3 months correlation between Fidelity and James is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Gold and James Balanced Golden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Balanced Golden 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 James Balanced:. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Balanced Golden has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and James Balanced: go up and down completely randomly.

Pair Corralation between Fidelity Advisor and James Balanced:

Assuming the 90 days horizon Fidelity Advisor Gold is expected to generate 4.59 times more return on investment than James Balanced:. However, Fidelity Advisor is 4.59 times more volatile than James Balanced Golden. It trades about 0.03 of its potential returns per unit of risk. James Balanced Golden is currently generating about 0.12 per unit of risk. If you would invest  2,680  in Fidelity Advisor Gold on August 31, 2024 and sell it today you would earn a total of  55.00  from holding Fidelity Advisor Gold or generate 2.05% return on investment over 90 days.

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

Fidelity Advisor Gold  vs.  James Balanced Golden

Fidelity Advisor Gold

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Gold are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. 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.

James Balanced Golden

Risk-Adjusted Performance

9 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in James Balanced Golden are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, James Balanced: 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 James Balanced:

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

The idea behind Fidelity Advisor Gold and James Balanced Golden 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.