Correlation Between Hartford Balanced and Fidelity Advisor

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

By analyzing existing cross correlation between The Hartford Balanced and Fidelity Advisor Multi Asset, you can compare the effects of market volatilities on Hartford Balanced 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 Hartford Balanced with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Balanced and Fidelity Advisor.

Diversification Opportunities for Hartford Balanced and Fidelity Advisor

0.54

Correlation Coefficient

Hartford Balanced  Fidelity Advisor

Very weak diversification

The 3 months correlation between Hartford and Fidelity is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Balanced and Fidelity Advisor Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Multi and Hartford Balanced 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 The Hartford Balanced 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 Multi has no effect on the direction of Hartford Balanced i.e., Hartford Balanced and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Hartford Balanced and Fidelity Advisor

Assuming the 90 days horizon Hartford Balanced is expected to generate 12.44 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, The Hartford Balanced is 1.53 times less risky than Fidelity Advisor. It trades about 0.02 of its potential returns per unit of risk. Fidelity Advisor Multi Asset is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,402  in Fidelity Advisor Multi Asset on September 13, 2024 and sell it today you would earn a total of  64.00  from holding Fidelity Advisor Multi Asset or generate 4.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

The Hartford Balanced  vs.  Fidelity Advisor Multi Asset

Hartford Balanced

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Balanced are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hartford Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Advisor Multi

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Multi Asset are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hartford Balanced and Fidelity Advisor

The main advantage of trading using opposite Hartford Balanced and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Balanced 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 The Hartford Balanced and Fidelity Advisor Multi Asset 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.