Correlation Between Alliancebernstein and Fidelity Puritan

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

By analyzing existing cross correlation between Alliancebernstein Global High and Fidelity Puritan Fund, you can compare the effects of market volatilities on Alliancebernstein and Fidelity Puritan 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 Puritan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Fidelity Puritan.

Diversification Opportunities for Alliancebernstein and Fidelity Puritan

-0.22

Correlation Coefficient

Alliancebernstein  Fidelity Puritan

Very good diversification

The 3 months correlation between Alliancebernstein and Fidelity is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Fidelity Puritan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Puritan 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 Global High are associated (or correlated) with Fidelity Puritan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Puritan has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Fidelity Puritan go up and down completely randomly.

Pair Corralation between Alliancebernstein and Fidelity Puritan

Considering the 90-day investment horizon Alliancebernstein Global High is expected to under-perform the Fidelity Puritan. But the fund apears to be less risky and, when comparing its historical volatility, Alliancebernstein Global High is 1.23 times less risky than Fidelity Puritan. The fund trades about 0.0 of its potential returns per unit of risk. The Fidelity Puritan Fund is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,404  in Fidelity Puritan Fund on September 4, 2024 and sell it today you would earn a total of  182.00  from holding Fidelity Puritan Fund or generate 7.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Alliancebernstein Global High  vs.  Fidelity Puritan Fund

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein Global High has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Fidelity Puritan

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Puritan Fund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Fidelity Puritan may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Alliancebernstein and Fidelity Puritan

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

The idea behind Alliancebernstein Global High and Fidelity Puritan Fund 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.