Correlation Between Fidelity Advantage and PIMCO Low

Can any of the company-specific risk be diversified away by investing in both Fidelity Advantage and PIMCO Low 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 PIMCO Low 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 PIMCO Low Duration, you can compare the effects of market volatilities on Fidelity Advantage and PIMCO Low 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 PIMCO Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advantage and PIMCO Low.

Diversification Opportunities for Fidelity Advantage and PIMCO Low

0.78

Correlation Coefficient

Fidelity Advantage  PIMCO Low

Poor diversification

The 3 months correlation between Fidelity and PIMCO is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advantage Bitcoin and PIMCO Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Low Duration 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 PIMCO Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Low Duration has no effect on the direction of Fidelity Advantage i.e., Fidelity Advantage and PIMCO Low go up and down completely randomly.

Pair Corralation between Fidelity Advantage and PIMCO Low

Assuming the 90 days trading horizon Fidelity Advantage Bitcoin is expected to generate 7.67 times more return on investment than PIMCO Low. However, Fidelity Advantage is 7.67 times more volatile than PIMCO Low Duration. It trades about 0.23 of its potential returns per unit of risk. PIMCO Low Duration is currently generating about 0.17 per unit of risk. If you would invest  3,989  in Fidelity Advantage Bitcoin on April 20, 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	Significant
Accuracy	100.0%
Values	Daily Returns

Fidelity Advantage Bitcoin  vs.  PIMCO Low Duration

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.

PIMCO Low Duration

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO Low Duration are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, PIMCO Low is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Advantage and PIMCO Low

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

The idea behind Fidelity Advantage Bitcoin and PIMCO Low Duration 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.