Correlation Between Dynamic Alternative and Fidelity Advanced

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

By analyzing existing cross correlation between Dynamic Alternative Yield and Fidelity Advanced Equity, you can compare the effects of market volatilities on Dynamic Alternative and Fidelity Advanced 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 Dynamic Alternative with a short position of Fidelity Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynamic Alternative and Fidelity Advanced.

Diversification Opportunities for Dynamic Alternative and Fidelity Advanced

0.63

Correlation Coefficient

Dynamic Alternative  Fidelity Advanced

Poor diversification

The 3 months correlation between Dynamic and Fidelity is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Alternative Yield and Fidelity Advanced Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advanced Equity and Dynamic Alternative 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 Dynamic Alternative Yield are associated (or correlated) with Fidelity Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advanced Equity has no effect on the direction of Dynamic Alternative i.e., Dynamic Alternative and Fidelity Advanced go up and down completely randomly.

Pair Corralation between Dynamic Alternative and Fidelity Advanced

Assuming the 90 days trading horizon Dynamic Alternative is expected to generate 10.28 times less return on investment than Fidelity Advanced. But when comparing it to its historical volatility, Dynamic Alternative Yield is 3.76 times less risky than Fidelity Advanced. It trades about 0.11 of its potential returns per unit of risk. Fidelity Advanced Equity is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  2,014  in Fidelity Advanced Equity on April 20, 2025 and sell it today you would earn a total of  434.00  from holding Fidelity Advanced Equity or generate 21.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Dynamic Alternative Yield  vs.  Fidelity Advanced Equity

Dynamic Alternative Yield

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dynamic Alternative Yield are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, Dynamic Alternative is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Fidelity Advanced Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advanced Equity are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak basic indicators, Fidelity Advanced displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dynamic Alternative and Fidelity Advanced

The main advantage of trading using opposite Dynamic Alternative and Fidelity Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynamic Alternative position performs unexpectedly, Fidelity Advanced 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 Advanced will offset losses from the drop in Fidelity Advanced's long position.

The idea behind Dynamic Alternative Yield and Fidelity Advanced Equity 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 Anywhere module to track or share privately all of your investments from the convenience of any device.