Correlation Between Northann Corp and Fidelity Advisor

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

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

Diversification Opportunities for Northann Corp and Fidelity Advisor

0.68

Correlation Coefficient

Northann Corp  Fidelity Advisor

Poor diversification

The 3 months correlation between Northann and Fidelity is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Northann Corp and Fidelity Advisor Sumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Sumer and Northann Corp 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 Northann Corp 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 Sumer has no effect on the direction of Northann Corp i.e., Northann Corp and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Northann Corp and Fidelity Advisor

Considering the 90-day investment horizon Northann Corp is expected to generate 9.18 times more return on investment than Fidelity Advisor. However, Northann Corp is 9.18 times more volatile than Fidelity Advisor Sumer. It trades about 0.01 of its potential returns per unit of risk. Fidelity Advisor Sumer is currently generating about 0.06 per unit of risk. If you would invest  460.00  in Northann Corp on October 6, 2024 and sell it today you would lose (430.00) from holding Northann Corp or give up 93.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	64.0%
Values	Daily Returns

Northann Corp  vs.  Fidelity Advisor Sumer

Northann Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Northann Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Northann Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Advisor Sumer

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Sumer are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Fidelity Advisor may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Northann Corp and Fidelity Advisor

The main advantage of trading using opposite Northann Corp and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northann Corp 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 Northann Corp and Fidelity Advisor Sumer 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.