Correlation Between Precious Metals and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Precious Metals 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 Precious Metals and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precious Metals Fund and Fidelity Advisor Gold, you can compare the effects of market volatilities on Precious Metals 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 Precious Metals with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precious Metals and Fidelity Advisor.
Diversification Opportunities for Precious Metals and Fidelity Advisor
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Precious and Fidelity is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Precious Metals Fund and Fidelity Advisor Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Gold and Precious Metals 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 Precious Metals Fund 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 Gold has no effect on the direction of Precious Metals i.e., Precious Metals and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Precious Metals and Fidelity Advisor
Assuming the 90 days horizon Precious Metals Fund is expected to generate 1.03 times more return on investment than Fidelity Advisor. However, Precious Metals is 1.03 times more volatile than Fidelity Advisor Gold. It trades about 0.2 of its potential returns per unit of risk. Fidelity Advisor Gold is currently generating about 0.16 per unit of risk. If you would invest 15,672 in Precious Metals Fund on May 27, 2025 and sell it today you would earn a total of 3,939 from holding Precious Metals Fund or generate 25.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precious Metals Fund vs. Fidelity Advisor Gold
Performance |
| Timeline |
| Precious Metals |
| Fidelity Advisor Gold |
Precious Metals and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precious Metals and Fidelity Advisor
The main advantage of trading using opposite Precious Metals and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precious Metals 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.| Precious Metals vs. Energy Fund Investor | Precious Metals vs. Energy Services Fund | Precious Metals vs. Basic Materials Fund | Precious Metals vs. Health Care Fund |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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