Correlation Between Allianzgi Diversified and Fidelity Advisor

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

By analyzing existing cross correlation between Allianzgi Diversified Income and Fidelity Advisor Diversified, you can compare the effects of market volatilities on Allianzgi Diversified 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 Allianzgi Diversified with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Diversified and Fidelity Advisor.

Diversification Opportunities for Allianzgi Diversified and Fidelity Advisor

0.5

Correlation Coefficient

Allianzgi Diversified  Fidelity Advisor

Very weak diversification

The 3 months correlation between Allianzgi and Fidelity is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Diversified Income and Fidelity Advisor Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Div and Allianzgi Diversified 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 Allianzgi Diversified Income 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 Div has no effect on the direction of Allianzgi Diversified i.e., Allianzgi Diversified and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Allianzgi Diversified and Fidelity Advisor

Considering the 90-day investment horizon Allianzgi Diversified Income is expected to under-perform the Fidelity Advisor. But the fund apears to be less risky and, when comparing its historical volatility, Allianzgi Diversified Income is 1.13 times less risky than Fidelity Advisor. The fund trades about -0.08 of its potential returns per unit of risk. The Fidelity Advisor Diversified is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  2,772  in Fidelity Advisor Diversified on December 3, 2024 and sell it today you would lose (78.00) from holding Fidelity Advisor Diversified or give up 2.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Allianzgi Diversified Income  vs.  Fidelity Advisor Diversified

Allianzgi Diversified

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianzgi Diversified Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable fundamental indicators, Allianzgi Diversified is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Fidelity Advisor Div

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Advisor Diversified has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Allianzgi Diversified and Fidelity Advisor

The main advantage of trading using opposite Allianzgi Diversified and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Diversified 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.

The idea behind Allianzgi Diversified Income and Fidelity Advisor Diversified 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.