Correlation Between Fidelity Advisor and Allianzgi Convertible

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Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Allianzgi Convertible 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 Advisor and Allianzgi Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Advisor Health and Allianzgi Convertible Income, you can compare the effects of market volatilities on Fidelity Advisor and Allianzgi Convertible 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 Advisor with a short position of Allianzgi Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Allianzgi Convertible.

Diversification Opportunities for Fidelity Advisor and Allianzgi Convertible

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Fidelity and Allianzgi is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Health and Allianzgi Convertible Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Convertible and Fidelity Advisor 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 Advisor Health are associated (or correlated) with Allianzgi Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Convertible has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Allianzgi Convertible go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Allianzgi Convertible

Assuming the 90 days horizon Fidelity Advisor Health is expected to under-perform the Allianzgi Convertible. In addition to that, Fidelity Advisor is 3.12 times more volatile than Allianzgi Convertible Income. It trades about -0.34 of its total potential returns per unit of risk. Allianzgi Convertible Income is currently generating about -0.25 per unit of volatility. If you would invest  408.00  in Allianzgi Convertible Income on September 29, 2024 and sell it today you would lose (17.00) from holding Allianzgi Convertible Income or give up 4.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Fidelity Advisor Health  vs.  Allianzgi Convertible Income

 Performance 
       Timeline  
Fidelity Advisor Health 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fidelity Advisor Health has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.
Allianzgi Convertible 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Convertible Income are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Allianzgi Convertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Advisor and Allianzgi Convertible Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fidelity Advisor and Allianzgi Convertible

The main advantage of trading using opposite Fidelity Advisor and Allianzgi Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Allianzgi Convertible 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 Allianzgi Convertible will offset losses from the drop in Allianzgi Convertible's long position.
The idea behind Fidelity Advisor Health and Allianzgi Convertible Income 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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