Correlation Between Fidelity Advisor and Archer Stock

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Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Archer Stock 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 Archer Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Technology and Archer Stock Fund, you can compare the effects of market volatilities on Fidelity Advisor and Archer Stock 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 Archer Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Archer Stock.

Diversification Opportunities for Fidelity Advisor and Archer Stock

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Fidelity and Archer is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Technology and Archer Stock Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Stock 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 Technology are associated (or correlated) with Archer Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Stock has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Archer Stock go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Archer Stock

Assuming the 90 days horizon Fidelity Advisor Technology is expected to generate 1.2 times more return on investment than Archer Stock. However, Fidelity Advisor is 1.2 times more volatile than Archer Stock Fund. It trades about 0.03 of its potential returns per unit of risk. Archer Stock Fund is currently generating about -0.12 per unit of risk. If you would invest  13,632  in Fidelity Advisor Technology on October 8, 2024 and sell it today you would earn a total of  289.00  from holding Fidelity Advisor Technology or generate 2.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Fidelity Advisor Technology  vs.  Archer Stock Fund

 Performance 
       Timeline  
Fidelity Advisor Tec 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Technology are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Archer Stock 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Archer Stock Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Fidelity Advisor and Archer Stock Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fidelity Advisor and Archer Stock

The main advantage of trading using opposite Fidelity Advisor and Archer Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Archer Stock 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 Archer Stock will offset losses from the drop in Archer Stock's long position.
The idea behind Fidelity Advisor Technology and Archer Stock 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.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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