Correlation Between Franklin Strategic and Fidelity Advisor

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

Diversification Opportunities for Franklin Strategic and Fidelity Advisor

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Franklin and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FRANKLIN STRATEGIC INCOME and FIDELITY ADVISOR STRATEGIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Str and Franklin Strategic 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 Franklin Strategic Income 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 Str has no effect on the direction of Franklin Strategic i.e., Franklin Strategic and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Franklin Strategic and Fidelity Advisor

If you would invest (100.00) in Fidelity Advisor Strategic on December 30, 2023 and sell it today you would earn a total of  100.00  from holding Fidelity Advisor Strategic or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

FRANKLIN STRATEGIC INCOME  vs.  FIDELITY ADVISOR STRATEGIC

 Performance 
       Timeline  
Franklin Strategic Income 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Strategic are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin Strategic and Fidelity Advisor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Franklin Strategic and Fidelity Advisor

The main advantage of trading using opposite Franklin Strategic and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Strategic 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 Franklin Strategic Income and Fidelity Advisor Strategic 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 Stocks Directory module to find actively traded stocks across global markets.

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