Correlation Between Allianzgi Health and Fidelity Advisor

Can any of the company-specific risk be diversified away by investing in both Allianzgi Health 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 Health 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 Health Sciences and Fidelity Advisor Financial, you can compare the effects of market volatilities on Allianzgi Health 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 Health with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Health and Fidelity Advisor.

Diversification Opportunities for Allianzgi Health and Fidelity Advisor

-0.75

Correlation Coefficient

Allianzgi Health  Fidelity Advisor

Pay attention - limited upside

The 3 months correlation between Allianzgi and Fidelity is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Health Sciences and Fidelity Advisor Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Fin and Allianzgi Health 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 Health Sciences 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 Fin has no effect on the direction of Allianzgi Health i.e., Allianzgi Health and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Allianzgi Health and Fidelity Advisor

Assuming the 90 days horizon Allianzgi Health Sciences is expected to generate 1.02 times more return on investment than Fidelity Advisor. However, Allianzgi Health is 1.02 times more volatile than Fidelity Advisor Financial. It trades about 0.06 of its potential returns per unit of risk. Fidelity Advisor Financial is currently generating about -0.03 per unit of risk. If you would invest  2,793  in Allianzgi Health Sciences on September 20, 2024 and sell it today you would earn a total of  22.00  from holding Allianzgi Health Sciences or generate 0.79% return on investment over 90 days.

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

Allianzgi Health Sciences  vs.  Fidelity Advisor Financial

Allianzgi Health Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianzgi Health Sciences has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Fidelity Advisor Fin

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Financial are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Fidelity Advisor may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Allianzgi Health and Fidelity Advisor

The main advantage of trading using opposite Allianzgi Health and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Health 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 Health Sciences and Fidelity Advisor Financial 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.