Correlation Between Fidelity Advantage and Evolve Innovation

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

By analyzing existing cross correlation between Fidelity Advantage Bitcoin and Evolve Innovation Index, you can compare the effects of market volatilities on Fidelity Advantage and Evolve Innovation 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 Advantage with a short position of Evolve Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advantage and Evolve Innovation.

Diversification Opportunities for Fidelity Advantage and Evolve Innovation

0.87

Correlation Coefficient

Fidelity Advantage  Evolve Innovation

Very poor diversification

The 3 months correlation between Fidelity and Evolve is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advantage Bitcoin and Evolve Innovation Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Innovation Index and Fidelity Advantage 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 Advantage Bitcoin are associated (or correlated) with Evolve Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Innovation Index has no effect on the direction of Fidelity Advantage i.e., Fidelity Advantage and Evolve Innovation go up and down completely randomly.

Pair Corralation between Fidelity Advantage and Evolve Innovation

Assuming the 90 days trading horizon Fidelity Advantage Bitcoin is expected to generate 1.79 times more return on investment than Evolve Innovation. However, Fidelity Advantage is 1.79 times more volatile than Evolve Innovation Index. It trades about 0.23 of its potential returns per unit of risk. Evolve Innovation Index is currently generating about 0.33 per unit of risk. If you would invest  3,989  in Fidelity Advantage Bitcoin on April 21, 2025 and sell it today you would earn a total of  1,326  from holding Fidelity Advantage Bitcoin or generate 33.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Fidelity Advantage Bitcoin  vs.  Evolve Innovation Index

Fidelity Advantage

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advantage Bitcoin are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fidelity Advantage displayed solid returns over the last few months and may actually be approaching a breakup point.

Evolve Innovation Index

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Innovation Index are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Evolve Innovation displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity Advantage and Evolve Innovation

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

The idea behind Fidelity Advantage Bitcoin and Evolve Innovation Index 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.