Correlation Between Fidelity Advisor and Oberweis Micro

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

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

Diversification Opportunities for Fidelity Advisor and Oberweis Micro

0.66

Correlation Coefficient

Fidelity Advisor  Oberweis Micro

Poor diversification

The 3 months correlation between FIDELITY and Oberweis is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Financial and Oberweis Micro Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Micro 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 Financial are associated (or correlated) with Oberweis Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis Micro Cap has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Oberweis Micro go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Oberweis Micro

Assuming the 90 days horizon Fidelity Advisor Financial is expected to generate 0.55 times more return on investment than Oberweis Micro. However, Fidelity Advisor Financial is 1.8 times less risky than Oberweis Micro. It trades about -0.05 of its potential returns per unit of risk. Oberweis Micro Cap Fund is currently generating about -0.23 per unit of risk. If you would invest  3,854  in Fidelity Advisor Financial on December 2, 2024 and sell it today you would lose (40.00) from holding Fidelity Advisor Financial or give up 1.04% of portfolio value over 90 days.

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

Fidelity Advisor Financial  vs.  Oberweis Micro Cap Fund

Fidelity Advisor Fin

Risk-Adjusted Performance

Very Weak

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

Oberweis Micro Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oberweis Micro Cap Fund 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 April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Fidelity Advisor and Oberweis Micro

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

The idea behind Fidelity Advisor Financial and Oberweis Micro Cap 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.

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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.