Correlation Between Icon Utilities and Fidelity Advisor

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

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

Diversification Opportunities for Icon Utilities and Fidelity Advisor

0.84

Correlation Coefficient

Icon Utilities  Fidelity Advisor

Very poor diversification

The 3 months correlation between Icon and FIDELITY is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Icon Utilities And and Fidelity Advisor Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Uti and Icon Utilities 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 Icon Utilities And 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 Uti has no effect on the direction of Icon Utilities i.e., Icon Utilities and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Icon Utilities and Fidelity Advisor

Assuming the 90 days horizon Icon Utilities is expected to generate 2.08 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Icon Utilities And is 1.53 times less risky than Fidelity Advisor. It trades about 0.15 of its potential returns per unit of risk. Fidelity Advisor Utilities is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,319  in Fidelity Advisor Utilities on September 2, 2024 and sell it today you would earn a total of  615.00  from holding Fidelity Advisor Utilities or generate 14.24% return on investment over 90 days.

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

Icon Utilities And  vs.  Fidelity Advisor Utilities

Icon Utilities And

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Utilities And are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Icon Utilities may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity Advisor Uti

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Utilities are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Advisor showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Icon Utilities and Fidelity Advisor

The main advantage of trading using opposite Icon Utilities and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Utilities 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 Icon Utilities And and Fidelity Advisor Utilities 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.