Correlation Between The Hartford and Fidelity Advisor

Can any of the company-specific risk be diversified away by investing in both The Hartford 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 The Hartford 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 Healthcare and Fidelity Advisor Energy, you can compare the effects of market volatilities on The Hartford 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 The Hartford with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Fidelity Advisor.

Diversification Opportunities for The Hartford and Fidelity Advisor

0.51

Correlation Coefficient

The Hartford  Fidelity Advisor

Very weak diversification

The 3 months correlation between The and Fidelity is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Healthcare and Fidelity Advisor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Energy and The Hartford 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 Healthcare 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 Energy has no effect on the direction of The Hartford i.e., The Hartford and Fidelity Advisor go up and down completely randomly.

Pair Corralation between The Hartford and Fidelity Advisor

Assuming the 90 days horizon The Hartford Healthcare is expected to under-perform the Fidelity Advisor. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Hartford Healthcare is 1.29 times less risky than Fidelity Advisor. The mutual fund trades about -0.27 of its potential returns per unit of risk. The Fidelity Advisor Energy is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  4,597  in Fidelity Advisor Energy on October 8, 2024 and sell it today you would lose (111.00) from holding Fidelity Advisor Energy or give up 2.41% of portfolio value over 90 days.

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

The Hartford Healthcare  vs.  Fidelity Advisor Energy

The Hartford Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford Healthcare has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Fidelity Advisor Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Advisor Energy has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with The Hartford and Fidelity Advisor

The main advantage of trading using opposite The Hartford and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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 Healthcare and Fidelity Advisor Energy 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..