Correlation Between Fidelity Advisor and Oberweis Small

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

Diversification Opportunities for Fidelity Advisor and Oberweis Small

0.69

Correlation Coefficient

Fidelity Advisor  Oberweis Small

Poor diversification

The 3 months correlation between Fidelity and Oberweis is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Energy and Oberweis Small Cap Opportuniti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Small 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 Energy are associated (or correlated) with Oberweis Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis Small Cap has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Oberweis Small go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Oberweis Small

Assuming the 90 days horizon Fidelity Advisor is expected to generate 1.41 times less return on investment than Oberweis Small. In addition to that, Fidelity Advisor is 1.06 times more volatile than Oberweis Small Cap Opportunities. It trades about 0.08 of its total potential returns per unit of risk. Oberweis Small Cap Opportunities is currently generating about 0.11 per unit of volatility. If you would invest  2,583  in Oberweis Small Cap Opportunities on September 2, 2024 and sell it today you would earn a total of  214.00  from holding Oberweis Small Cap Opportunities or generate 8.28% return on investment over 90 days.

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

Fidelity Advisor Energy  vs.  Oberweis Small Cap Opportuniti

Fidelity Advisor Energy

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Energy are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oberweis Small Cap

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with Fidelity Advisor and Oberweis Small

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

The idea behind Fidelity Advisor Energy and Oberweis Small Cap Opportunities 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.