Correlation Between Alliancebernstein and Fidelity Managed

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

By analyzing existing cross correlation between Alliancebernstein National Municipal and Fidelity Managed Retirement, you can compare the effects of market volatilities on Alliancebernstein and Fidelity Managed 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 Alliancebernstein with a short position of Fidelity Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Fidelity Managed.

Diversification Opportunities for Alliancebernstein and Fidelity Managed

0.85

Correlation Coefficient

Alliancebernstein  Fidelity Managed

Very poor diversification

The 3 months correlation between Alliancebernstein and Fidelity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Fidelity Managed Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Managed Ret and Alliancebernstein 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 Alliancebernstein National Municipal are associated (or correlated) with Fidelity Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Managed Ret has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Fidelity Managed go up and down completely randomly.

Pair Corralation between Alliancebernstein and Fidelity Managed

Considering the 90-day investment horizon Alliancebernstein National Municipal is expected to generate 2.49 times more return on investment than Fidelity Managed. However, Alliancebernstein is 2.49 times more volatile than Fidelity Managed Retirement. It trades about 0.04 of its potential returns per unit of risk. Fidelity Managed Retirement is currently generating about 0.06 per unit of risk. If you would invest  1,131  in Alliancebernstein National Municipal on September 3, 2024 and sell it today you would earn a total of  18.00  from holding Alliancebernstein National Municipal or generate 1.59% return on investment over 90 days.

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

Alliancebernstein National Mun  vs.  Fidelity Managed Retirement

Alliancebernstein

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alliancebernstein National Municipal are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong technical and fundamental indicators, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Managed Ret

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Managed Retirement are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Fidelity Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alliancebernstein and Fidelity Managed

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

The idea behind Alliancebernstein National Municipal and Fidelity Managed Retirement 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.