Correlation Between Federated Government and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Federated Government 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 Federated Government and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Government Income and Fidelity Advisor Utilities, you can compare the effects of market volatilities on Federated Government 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 Federated Government with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Government and Fidelity Advisor.
Diversification Opportunities for Federated Government and Fidelity Advisor
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and Fidelity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Federated Government Income and Fidelity Advisor Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Uti and Federated Government 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 Federated Government 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 Uti has no effect on the direction of Federated Government i.e., Federated Government and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Federated Government and Fidelity Advisor
Assuming the 90 days horizon Federated Government is expected to generate 3.69 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Federated Government Income is 2.45 times less risky than Fidelity Advisor. It trades about 0.05 of its potential returns per unit of risk. Fidelity Advisor Utilities is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,401 in Fidelity Advisor Utilities on June 4, 2025 and sell it today you would earn a total of 1,469 from holding Fidelity Advisor Utilities or generate 43.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Government Income vs. Fidelity Advisor Utilities
Performance |
| Timeline |
| Federated Government |
| Fidelity Advisor Uti |
Federated Government and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Government and Fidelity Advisor
The main advantage of trading using opposite Federated Government and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Government 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.| Federated Government vs. Qs Large Cap | Federated Government vs. Qs Large Cap | Federated Government vs. Cb Large Cap | Federated Government vs. Vanguard Large Cap Index |
| Fidelity Advisor vs. Old Westbury Large | Fidelity Advisor vs. Us Vector Equity | Fidelity Advisor vs. Nuveen Equity Longshort | Fidelity Advisor vs. Goldman Sachs Equity |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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