Correlation Between Multi Manager and Fidelity Advisor

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

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

Diversification Opportunities for Multi Manager and Fidelity Advisor

0.0

Correlation Coefficient

Multi Manager  Fidelity Advisor

Pay attention - limited upside

The 3 months correlation between Multi and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager High Yield and Fidelity Advisor Overseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Overseas and Multi Manager 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 Multi Manager High Yield 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 Overseas has no effect on the direction of Multi Manager i.e., Multi Manager and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Multi Manager and Fidelity Advisor

Assuming the 90 days horizon Multi Manager High Yield is expected to generate 0.19 times more return on investment than Fidelity Advisor. However, Multi Manager High Yield is 5.37 times less risky than Fidelity Advisor. It trades about 0.19 of its potential returns per unit of risk. Fidelity Advisor Overseas is currently generating about 0.02 per unit of risk. If you would invest  833.00  in Multi Manager High Yield on October 25, 2024 and sell it today you would earn a total of  14.00  from holding Multi Manager High Yield or generate 1.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Multi Manager High Yield  vs.  Fidelity Advisor Overseas

Multi Manager High

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Manager High Yield are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Multi Manager is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Advisor Overseas

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Overseas are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. 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 Multi Manager and Fidelity Advisor

The main advantage of trading using opposite Multi Manager and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager 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 Multi Manager High Yield and Fidelity Advisor Overseas 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.