Correlation Between Fidelity Advisor and CVS Health
Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and CVS Health 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 Fidelity Advisor and CVS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor 529 and CVS Health Corp, you can compare the effects of market volatilities on Fidelity Advisor and CVS Health 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 Fidelity Advisor with a short position of CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and CVS Health.
Diversification Opportunities for Fidelity Advisor and CVS Health
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and CVS is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor 529 and CVS Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health Corp and Fidelity Advisor 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 Fidelity Advisor 529 are associated (or correlated) with CVS Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS Health Corp has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and CVS Health go up and down completely randomly.
Pair Corralation between Fidelity Advisor and CVS Health
Assuming the 90 days horizon Fidelity Advisor 529 is expected to generate 0.56 times more return on investment than CVS Health. However, Fidelity Advisor 529 is 1.79 times less risky than CVS Health. It trades about -0.07 of its potential returns per unit of risk. CVS Health Corp is currently generating about -0.3 per unit of risk. If you would invest 6,273 in Fidelity Advisor 529 on January 17, 2024 and sell it today you would lose (100.00) from holding Fidelity Advisor 529 or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fidelity Advisor 529 vs. CVS Health Corp
Performance |
| Timeline |
| Fidelity Advisor 529 |
| CVS Health Corp |
Fidelity Advisor and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Advisor and CVS Health
The main advantage of trading using opposite Fidelity Advisor and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, CVS Health 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 CVS Health will offset losses from the drop in CVS Health's long position.| Fidelity Advisor vs. Invesco Advantage MIT | Fidelity Advisor vs. Invesco Quality Municipal | Fidelity Advisor vs. Invesco California Value | Fidelity Advisor vs. DWS Municipal Income |
| CVS Health vs. Humana Inc | CVS Health vs. Cigna Corp | CVS Health vs. Elevance Health | CVS Health vs. Centene Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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