Correlation Between Kinetics Market and Fidelity Advisor

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

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

Diversification Opportunities for Kinetics Market and Fidelity Advisor

0.79

Correlation Coefficient

Kinetics Market  Fidelity Advisor

Poor diversification

The 3 months correlation between Kinetics and Fidelity is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities 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 Kinetics Market 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 Kinetics Market Opportunities 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 Kinetics Market i.e., Kinetics Market and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Kinetics Market and Fidelity Advisor

Assuming the 90 days horizon Kinetics Market is expected to generate 1.14 times less return on investment than Fidelity Advisor. In addition to that, Kinetics Market is 1.28 times more volatile than Fidelity Advisor Growth. It trades about 0.08 of its total potential returns per unit of risk. Fidelity Advisor Growth is currently generating about 0.12 per unit of volatility. If you would invest  7,048  in Fidelity Advisor Growth on September 21, 2024 and sell it today you would earn a total of  7,186  from holding Fidelity Advisor Growth or generate 101.96% return on investment over 90 days.

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

Kinetics Market Opportunities  vs.  Fidelity Advisor Growth

Kinetics Market Oppo

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Market Opportunities are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Kinetics Market showed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Advisor Growth

Risk-Adjusted Performance

9 of 100

OK

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 January 2025.

Pair Trading with Kinetics Market and Fidelity Advisor

The main advantage of trading using opposite Kinetics Market and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Market 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 Kinetics Market Opportunities 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.