Correlation Between Fidelity Advisor and Pfizer

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

Diversification Opportunities for Fidelity Advisor and Pfizer

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Fidelity and Pfizer is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding FIDELITY ADVISOR STOCK and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc 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 Stock are associated (or correlated) with Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Pfizer go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Pfizer

Assuming the 90 days horizon Fidelity Advisor Stock is expected to generate 0.41 times more return on investment than Pfizer. However, Fidelity Advisor Stock is 2.44 times less risky than Pfizer. It trades about 0.31 of its potential returns per unit of risk. Pfizer Inc is currently generating about 0.1 per unit of risk. If you would invest  3,978  in Fidelity Advisor Stock on December 29, 2023 and sell it today you would earn a total of  194.00  from holding Fidelity Advisor Stock or generate 4.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

FIDELITY ADVISOR STOCK  vs.  Pfizer Inc

 Performance 
       Timeline  
Fidelity Advisor Stock 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Stock are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly fragile fundamental indicators, Fidelity Advisor may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Pfizer Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Pfizer is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Fidelity Advisor and Pfizer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fidelity Advisor and Pfizer

The main advantage of trading using opposite Fidelity Advisor and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Pfizer 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 Pfizer will offset losses from the drop in Pfizer's long position.
The idea behind Fidelity Advisor Stock and Pfizer Inc 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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