Correlation Between State Street and Fidelity Advisor

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both State Street 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 State Street and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Target and Fidelity Advisor Financial, you can compare the effects of market volatilities on State Street 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 State Street with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Fidelity Advisor.

Diversification Opportunities for State Street and Fidelity Advisor

0.57
  Correlation Coefficient

Very weak diversification

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

Pair Corralation between State Street and Fidelity Advisor

Assuming the 90 days horizon State Street Target is expected to under-perform the Fidelity Advisor. In addition to that, State Street is 1.2 times more volatile than Fidelity Advisor Financial. It trades about -0.28 of its total potential returns per unit of risk. Fidelity Advisor Financial is currently generating about -0.31 per unit of volatility. If you would invest  3,935  in Fidelity Advisor Financial on October 10, 2024 and sell it today you would lose (288.00) from holding Fidelity Advisor Financial or give up 7.32% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

State Street Target  vs.  Fidelity Advisor Financial

 Performance 
       Timeline  
State Street Target 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days State Street Target has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
Fidelity Advisor Fin 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Financial are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

State Street and Fidelity Advisor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with State Street and Fidelity Advisor

The main advantage of trading using opposite State Street and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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 State Street Target and Fidelity Advisor Financial 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance