Correlation Between Fidelity Advisor and Guidemark(r) Small/mid

Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Guidemark(r) Small/mid 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 Guidemark(r) Small/mid 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 Guidemark Smallmid Cap, you can compare the effects of market volatilities on Fidelity Advisor and Guidemark(r) Small/mid 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 Guidemark(r) Small/mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Guidemark(r) Small/mid.

Diversification Opportunities for Fidelity Advisor and Guidemark(r) Small/mid

-0.65

Correlation Coefficient

Fidelity Advisor  Guidemark(r) Small/mid

Excellent diversification

The 3 months correlation between Fidelity and Guidemark(r) is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Gold and Guidemark Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Smallmid Cap 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 Guidemark(r) Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Smallmid Cap has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Guidemark(r) Small/mid go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Guidemark(r) Small/mid

Assuming the 90 days horizon Fidelity Advisor Gold is expected to generate 1.35 times more return on investment than Guidemark(r) Small/mid. However, Fidelity Advisor is 1.35 times more volatile than Guidemark Smallmid Cap. It trades about 0.31 of its potential returns per unit of risk. Guidemark Smallmid Cap is currently generating about -0.1 per unit of risk. If you would invest  2,443  in Fidelity Advisor Gold on December 30, 2024 and sell it today you would earn a total of  831.00  from holding Fidelity Advisor Gold or generate 34.02% return on investment over 90 days.

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

Fidelity Advisor Gold  vs.  Guidemark Smallmid Cap

Fidelity Advisor Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Gold are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Fidelity Advisor showed solid returns over the last few months and may actually be approaching a breakup point.

Guidemark Smallmid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guidemark Smallmid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's primary 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 Guidemark(r) Small/mid

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

The idea behind Fidelity Advisor Gold and Guidemark Smallmid Cap 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.