Correlation Between NVIDIA and Fidelity Advisor

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

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

Diversification Opportunities for NVIDIA and Fidelity Advisor

0.57

Correlation Coefficient

NVIDIA  Fidelity Advisor

Very weak diversification

The 3 months correlation between NVIDIA and Fidelity is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Fidelity Advisor Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Series and NVIDIA 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 NVIDIA 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 Series has no effect on the direction of NVIDIA i.e., NVIDIA and Fidelity Advisor go up and down completely randomly.

Pair Corralation between NVIDIA and Fidelity Advisor

Given the investment horizon of 90 days NVIDIA is expected to generate 0.41 times more return on investment than Fidelity Advisor. However, NVIDIA is 2.42 times less risky than Fidelity Advisor. It trades about -0.11 of its potential returns per unit of risk. Fidelity Advisor Series is currently generating about -0.25 per unit of risk. If you would invest  14,513  in NVIDIA on October 5, 2024 and sell it today you would lose (682.00) from holding NVIDIA or give up 4.7% of portfolio value over 90 days.

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

NVIDIA  vs.  Fidelity Advisor Series

NVIDIA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, NVIDIA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Fidelity Advisor Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Advisor Series has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with NVIDIA and Fidelity Advisor

The main advantage of trading using opposite NVIDIA and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA 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 NVIDIA and Fidelity Advisor Series 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.