Correlation Between Algebris UCITS and Fidelity America

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

By analyzing existing cross correlation between Algebris UCITS Funds and Fidelity America AD, you can compare the effects of market volatilities on Algebris UCITS and Fidelity America 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 Algebris UCITS with a short position of Fidelity America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algebris UCITS and Fidelity America.

Diversification Opportunities for Algebris UCITS and Fidelity America

-0.47

Correlation Coefficient

Algebris UCITS  Fidelity America

Very good diversification

The 3 months correlation between Algebris and Fidelity is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Algebris UCITS Funds and Fidelity America AD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity America and Algebris UCITS 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 Algebris UCITS Funds are associated (or correlated) with Fidelity America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity America has no effect on the direction of Algebris UCITS i.e., Algebris UCITS and Fidelity America go up and down completely randomly.

Pair Corralation between Algebris UCITS and Fidelity America

Assuming the 90 days trading horizon Algebris UCITS is expected to generate 1.71 times less return on investment than Fidelity America. But when comparing it to its historical volatility, Algebris UCITS Funds is 2.89 times less risky than Fidelity America. It trades about 0.1 of its potential returns per unit of risk. Fidelity America AD is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,425  in Fidelity America AD on October 11, 2024 and sell it today you would earn a total of  159.00  from holding Fidelity America AD or generate 11.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	45.29%
Values	Daily Returns

Algebris UCITS Funds  vs.  Fidelity America AD

Algebris UCITS Funds

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Algebris UCITS Funds are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Algebris UCITS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity America

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity America AD are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sluggish technical and fundamental indicators, Fidelity America may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Algebris UCITS and Fidelity America

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

The idea behind Algebris UCITS Funds and Fidelity America AD 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.