Correlation Between Ivy Asset and Fidelity Advisor

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

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

Diversification Opportunities for Ivy Asset and Fidelity Advisor

0.42

Correlation Coefficient

Ivy Asset  Fidelity Advisor

Very weak diversification

The 3 months correlation between IVY and Fidelity is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Asset Strategy and Fidelity Advisor Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Gold and Ivy Asset 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 Ivy Asset Strategy 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 Gold has no effect on the direction of Ivy Asset i.e., Ivy Asset and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Ivy Asset and Fidelity Advisor

Assuming the 90 days horizon Ivy Asset is expected to generate 42.55 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Ivy Asset Strategy is 2.38 times less risky than Fidelity Advisor. It trades about 0.02 of its potential returns per unit of risk. Fidelity Advisor Gold is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  2,443  in Fidelity Advisor Gold on December 29, 2024 and sell it today you would earn a total of  831.00  from holding Fidelity Advisor Gold or generate 34.02% return on investment over 90 days.

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

Ivy Asset Strategy  vs.  Fidelity Advisor Gold

Ivy Asset Strategy

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ivy Asset Strategy are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Ivy Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Advisor Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Gold are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Fidelity Advisor showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ivy Asset and Fidelity Advisor

The main advantage of trading using opposite Ivy Asset and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivy Asset 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 Ivy Asset Strategy and Fidelity Advisor Gold 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.