Correlation Between Touchstone Large and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Touchstone Large 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 Touchstone Large and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Large Cap and Fidelity Advisor Growth, you can compare the effects of market volatilities on Touchstone Large 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 Touchstone Large with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Fidelity Advisor.
Diversification Opportunities for Touchstone Large and Fidelity Advisor
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Touchstone and Fidelity is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap 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 Touchstone Large 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 Touchstone Large Cap 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 Touchstone Large i.e., Touchstone Large and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Touchstone Large and Fidelity Advisor
Assuming the 90 days horizon Touchstone Large Cap is expected to under-perform the Fidelity Advisor. But the mutual fund apears to be less risky and, when comparing its historical volatility, Touchstone Large Cap is 1.82 times less risky than Fidelity Advisor. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Fidelity Advisor Growth is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 13,900 in Fidelity Advisor Growth on November 18, 2024 and sell it today you would earn a total of 1,342 from holding Fidelity Advisor Growth or generate 9.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Touchstone Large Cap vs. Fidelity Advisor Growth
Performance |
Timeline |
Touchstone Large Cap |
Fidelity Advisor Growth |
Touchstone Large and Fidelity Advisor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Touchstone Large and Fidelity Advisor
The main advantage of trading using opposite Touchstone Large and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large 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.Touchstone Large vs. Arrow Managed Futures | ||
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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