Correlation Between Growth Allocation and Fidelity Advisor

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

Diversification Opportunities for Growth Allocation and Fidelity Advisor

GrowthFidelityDiversified AwayGrowthFidelityDiversified Away100%
0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Growth and Fidelity is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Growth Allocation Fund and Fidelity Advisor Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Growth and Growth Allocation 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 Growth Allocation Fund are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Growth has no effect on the direction of Growth Allocation i.e., Growth Allocation and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Growth Allocation and Fidelity Advisor

Assuming the 90 days horizon Growth Allocation is expected to generate 3.62 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Growth Allocation Fund is 2.41 times less risky than Fidelity Advisor. It trades about 0.08 of its potential returns per unit of risk. Fidelity Advisor Growth is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  13,900  in Fidelity Advisor Growth on November 18, 2024 and sell it today you would earn a total of  1,342  from holding Fidelity Advisor Growth or generate 9.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Growth Allocation Fund  vs.  Fidelity Advisor Growth

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -4-20246
JavaScript chart by amCharts 3.21.15GGRYX FACGX
       Timeline  
Growth Allocation 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Growth Allocation Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Growth Allocation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb12.612.712.812.91313.113.2
Fidelity Advisor Growth 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Growth are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Fidelity Advisor may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb140142144146148150152

Growth Allocation and Fidelity Advisor Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.76-1.31-0.86-0.41-0.0073870.390.841.291.742.19 0.20.40.60.81.01.2
JavaScript chart by amCharts 3.21.15GGRYX FACGX
       Returns  

Pair Trading with Growth Allocation and Fidelity Advisor

The main advantage of trading using opposite Growth Allocation and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Allocation position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.
The idea behind Growth Allocation Fund and Fidelity Advisor Growth 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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