Correlation Between New Economy and Fidelity Advisor

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

Diversification Opportunities for New Economy and Fidelity Advisor

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between New Economy and Fidelity Advisor

If you would invest  3,817  in Fidelity Advisor New on December 30, 2023 and sell it today you would earn a total of  146.00  from holding Fidelity Advisor New or generate 3.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

NEW ECONOMY FUND  vs.  FIDELITY ADVISOR NEW

 Performance 
       Timeline  
New Economy Fund 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Solid
Over the last 90 days New Economy Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, New Economy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Fidelity Advisor New 

Risk-Adjusted Performance

22 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor New are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Advisor showed solid returns over the last few months and may actually be approaching a breakup point.

New Economy and Fidelity Advisor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with New Economy and Fidelity Advisor

The main advantage of trading using opposite New Economy and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Economy 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 New Economy Fund and Fidelity Advisor New 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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