Correlation Between Fidelity Advisor and Forester Value

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

Diversification Opportunities for Fidelity Advisor and Forester Value

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Fidelity and Forester is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Sustainable and FORESTER VALUE FUND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forester Value Fund 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 Sustainable are associated (or correlated) with Forester Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forester Value Fund has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Forester Value go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Forester Value

Assuming the 90 days horizon Fidelity Advisor Sustainable is expected to generate 0.12 times more return on investment than Forester Value. However, Fidelity Advisor Sustainable is 8.04 times less risky than Forester Value. It trades about 0.27 of its potential returns per unit of risk. Forester Value Fund is currently generating about -0.02 per unit of risk. If you would invest  947.00  in Fidelity Advisor Sustainable on December 29, 2023 and sell it today you would earn a total of  72.00  from holding Fidelity Advisor Sustainable or generate 7.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.77%
ValuesDaily Returns

Fidelity Advisor Sustainable  vs.  FORESTER VALUE FUND

 Performance 
       Timeline  
Fidelity Advisor Sus 

Risk-Adjusted Performance

22 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Sustainable are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and 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.
Forester Value Fund 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Forester Value Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Forester Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Advisor and Forester Value Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fidelity Advisor and Forester Value

The main advantage of trading using opposite Fidelity Advisor and Forester Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Forester Value 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 Forester Value will offset losses from the drop in Forester Value's long position.
The idea behind Fidelity Advisor Sustainable and Forester Value Fund 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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