Correlation Between Clearbridge Energy and Fidelity Advisor

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

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

Diversification Opportunities for Clearbridge Energy and Fidelity Advisor

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Correlation Coefficient

Clearbridge Energy  Fidelity Advisor

Pay attention - limited upside

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

Pair Corralation between Clearbridge Energy and Fidelity Advisor

Assuming the 90 days horizon Clearbridge Energy Mlp is expected to generate 0.61 times more return on investment than Fidelity Advisor. However, Clearbridge Energy Mlp is 1.65 times less risky than Fidelity Advisor. It trades about 0.06 of its potential returns per unit of risk. Fidelity Advisor Energy is currently generating about -0.03 per unit of risk. If you would invest  4,387  in Clearbridge Energy Mlp on October 9, 2024 and sell it today you would earn a total of  315.00  from holding Clearbridge Energy Mlp or generate 7.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.17%
Values	Daily Returns

Clearbridge Energy Mlp  vs.  Fidelity Advisor Energy

Clearbridge Energy Mlp

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Clearbridge Energy Mlp has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Clearbridge Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Advisor Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Advisor Energy has generated negative risk-adjusted returns adding no value to fund investors. 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 Clearbridge Energy and Fidelity Advisor

The main advantage of trading using opposite Clearbridge Energy and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy 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 Clearbridge Energy Mlp and Fidelity Advisor Energy 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.