Correlation Between Fidelity Advisor and John Hancock

Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and John Hancock 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 John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fidelity Advisor Health and John Hancock Bond, you can compare the effects of market volatilities on Fidelity Advisor and John Hancock 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 John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and John Hancock.

Diversification Opportunities for Fidelity Advisor and John Hancock

0.67

Correlation Coefficient

Fidelity Advisor  John Hancock

Poor diversification

The 3 months correlation between Fidelity and John is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Health and John Hancock Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Bond 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 Health are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Bond has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and John Hancock go up and down completely randomly.

Pair Corralation between Fidelity Advisor and John Hancock

Assuming the 90 days horizon Fidelity Advisor Health is expected to generate 2.34 times more return on investment than John Hancock. However, Fidelity Advisor is 2.34 times more volatile than John Hancock Bond. It trades about 0.08 of its potential returns per unit of risk. John Hancock Bond is currently generating about 0.07 per unit of risk. If you would invest  4,170  in Fidelity Advisor Health on September 4, 2024 and sell it today you would earn a total of  747.00  from holding Fidelity Advisor Health or generate 17.91% return on investment over 90 days.

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

Fidelity Advisor Health  vs.  John Hancock Bond

Fidelity Advisor Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Advisor Health has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

John Hancock Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, John Hancock 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 John Hancock

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

The idea behind Fidelity Advisor Health and John Hancock Bond 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.

Check out your portfolio center.

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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.