Correlation Between Penn Capital and Fidelity Advisor

Can any of the company-specific risk be diversified away by investing in both Penn Capital 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 Penn Capital and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Penn Capital Senior and Fidelity Advisor Floating, you can compare the effects of market volatilities on Penn Capital 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 Penn Capital with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn Capital and Fidelity Advisor.

Diversification Opportunities for Penn Capital and Fidelity Advisor

0.55

Correlation Coefficient

Penn Capital  Fidelity Advisor

Very weak diversification

The 3 months correlation between Penn and Fidelity is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Penn Capital Senior and Fidelity Advisor Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Floating and Penn Capital 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 Penn Capital Senior 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 Floating has no effect on the direction of Penn Capital i.e., Penn Capital and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Penn Capital and Fidelity Advisor

If you would invest  925.00  in Fidelity Advisor Floating on January 20, 2024 and sell it today you would earn a total of  3.00  from holding Fidelity Advisor Floating or generate 0.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Penn Capital Senior  vs.  Fidelity Advisor Floating

Penn Capital Senior

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Penn Capital Senior has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Penn Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Advisor Floating

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Floating are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Penn Capital and Fidelity Advisor

The main advantage of trading using opposite Penn Capital and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn Capital 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 Penn Capital Senior and Fidelity Advisor Floating 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.