Correlation Between Fidelity Advisor and Pimco Low

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

Diversification Opportunities for Fidelity Advisor and Pimco Low

-0.04

Correlation Coefficient

Fidelity Advisor  Pimco Low

Good diversification

The 3 months correlation between Fidelity and Pimco is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Gold and Pimco Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Low Duration 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 Pimco Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Low Duration has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Pimco Low go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Pimco Low

Assuming the 90 days horizon Fidelity Advisor is expected to generate 1.53 times less return on investment than Pimco Low. In addition to that, Fidelity Advisor is 8.94 times more volatile than Pimco Low Duration. It trades about 0.01 of its total potential returns per unit of risk. Pimco Low Duration is currently generating about 0.12 per unit of volatility. If you would invest  718.00  in Pimco Low Duration on October 3, 2024 and sell it today you would earn a total of  84.00  from holding Pimco Low Duration or generate 11.7% return on investment over 90 days.

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

Fidelity Advisor Gold  vs.  Pimco Low Duration

Fidelity Advisor Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Advisor Gold has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pimco Low Duration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Low Duration has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Pimco Low 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 Pimco Low

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

The idea behind Fidelity Advisor Gold and Pimco Low Duration 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.