Correlation Between Fidelity Advisor and Bear Profund

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

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

Diversification Opportunities for Fidelity Advisor and Bear Profund

-0.37

Correlation Coefficient

Fidelity Advisor  Bear Profund

Very good diversification

The 3 months correlation between Fidelity and Bear is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Energy and Bear Profund Bear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bear Profund Bear 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 Energy are associated (or correlated) with Bear Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bear Profund Bear has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Bear Profund go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Bear Profund

Assuming the 90 days horizon Fidelity Advisor is expected to generate 1.01 times less return on investment than Bear Profund. In addition to that, Fidelity Advisor is 1.33 times more volatile than Bear Profund Bear. It trades about 0.08 of its total potential returns per unit of risk. Bear Profund Bear is currently generating about 0.1 per unit of volatility. If you would invest  968.00  in Bear Profund Bear on December 29, 2024 and sell it today you would earn a total of  61.00  from holding Bear Profund Bear or generate 6.3% return on investment over 90 days.

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

Fidelity Advisor Energy  vs.  Bear Profund Bear

Fidelity Advisor Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Energy are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Advisor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bear Profund Bear

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bear Profund Bear are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Bear Profund may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fidelity Advisor and Bear Profund

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

The idea behind Fidelity Advisor Energy and Bear Profund Bear 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.