Correlation Between Fidelity Advisor and Voya Large-cap

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

Diversification Opportunities for Fidelity Advisor and Voya Large-cap

-0.47

Correlation Coefficient

Fidelity Advisor  Voya Large-cap

Very good diversification

The 3 months correlation between Fidelity and Voya is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Gold and Voya Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large 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 Voya Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Voya Large-cap go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Voya Large-cap

Assuming the 90 days horizon Fidelity Advisor Gold is expected to generate 1.04 times more return on investment than Voya Large-cap. However, Fidelity Advisor is 1.04 times more volatile than Voya Large Cap Growth. It trades about 0.29 of its potential returns per unit of risk. Voya Large Cap Growth is currently generating about -0.12 per unit of risk. If you would invest  2,482  in Fidelity Advisor Gold on December 21, 2024 and sell it today you would earn a total of  767.00  from holding Fidelity Advisor Gold or generate 30.9% return on investment over 90 days.

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

Fidelity Advisor Gold  vs.  Voya Large Cap Growth

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 23 (%) 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.

Voya Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voya Large Cap Growth 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 Voya Large-cap

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

The idea behind Fidelity Advisor Gold and Voya Large Cap Growth 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.