Correlation Between Jpmorgan Value and Fidelity Advisor

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

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

Diversification Opportunities for Jpmorgan Value and Fidelity Advisor

0.73

Correlation Coefficient

Jpmorgan Value  Fidelity Advisor

Poor diversification

The 3 months correlation between Jpmorgan and Fidelity is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Value Advantage 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 Jpmorgan Value 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 Jpmorgan Value Advantage 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 Jpmorgan Value i.e., Jpmorgan Value and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Jpmorgan Value and Fidelity Advisor

Assuming the 90 days horizon Jpmorgan Value Advantage is expected to under-perform the Fidelity Advisor. In addition to that, Jpmorgan Value is 1.92 times more volatile than Fidelity Advisor Utilities. It trades about -0.23 of its total potential returns per unit of risk. Fidelity Advisor Utilities is currently generating about -0.01 per unit of volatility. If you would invest  4,779  in Fidelity Advisor Utilities on September 14, 2024 and sell it today you would lose (16.00) from holding Fidelity Advisor Utilities or give up 0.33% of portfolio value over 90 days.

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

Jpmorgan Value Advantage  vs.  Fidelity Advisor Utilities

Jpmorgan Value Advantage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Value Advantage has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jpmorgan Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Advisor Uti

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Utilities are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward 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 Jpmorgan Value and Fidelity Advisor

The main advantage of trading using opposite Jpmorgan Value and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Value 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 Jpmorgan Value Advantage 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.