Correlation Between Fidelity Advisor and Kopernik International

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

Diversification Opportunities for Fidelity Advisor and Kopernik International

0.89

Correlation Coefficient

Fidelity Advisor  Kopernik International

Very poor diversification

The 3 months correlation between Fidelity and Kopernik is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Gold and Kopernik International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopernik International 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 Kopernik International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopernik International has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Kopernik International go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Kopernik International

Assuming the 90 days horizon Fidelity Advisor Gold is expected to generate 2.26 times more return on investment than Kopernik International. However, Fidelity Advisor is 2.26 times more volatile than Kopernik International Fund. It trades about 0.28 of its potential returns per unit of risk. Kopernik International Fund is currently generating about 0.31 per unit of risk. If you would invest  2,482  in Fidelity Advisor Gold on December 22, 2024 and sell it today you would earn a total of  735.00  from holding Fidelity Advisor Gold or generate 29.61% return on investment over 90 days.

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

Fidelity Advisor Gold  vs.  Kopernik International Fund

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 22 (%) 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.

Kopernik International

Risk-Adjusted Performance

Solid

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

Pair Trading with Fidelity Advisor and Kopernik International

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

The idea behind Fidelity Advisor Gold and Kopernik International 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .