Correlation Between AllianceBernstein and BlackRock Long

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

By analyzing existing cross correlation between AllianceBernstein Holding LP and BlackRock Long Term Municipal, you can compare the effects of market volatilities on AllianceBernstein and BlackRock Long 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 BlackRock Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianceBernstein and BlackRock Long.

Diversification Opportunities for AllianceBernstein and BlackRock Long

-0.47

Correlation Coefficient

AllianceBernstein  BlackRock Long

Very good diversification

The 3 months correlation between AllianceBernstein and BlackRock is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and BlackRock Long Term Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Long Term 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 Holding LP are associated (or correlated) with BlackRock Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Long Term has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and BlackRock Long go up and down completely randomly.

Pair Corralation between AllianceBernstein and BlackRock Long

Allowing for the 90-day total investment horizon AllianceBernstein Holding LP is expected to generate 1.89 times more return on investment than BlackRock Long. However, AllianceBernstein is 1.89 times more volatile than BlackRock Long Term Municipal. It trades about 0.09 of its potential returns per unit of risk. BlackRock Long Term Municipal is currently generating about 0.01 per unit of risk. If you would invest  3,212  in AllianceBernstein Holding LP on September 29, 2024 and sell it today you would earn a total of  512.00  from holding AllianceBernstein Holding LP or generate 15.94% return on investment over 90 days.

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

AllianceBernstein Holding LP  vs.  BlackRock Long Term Municipal

AllianceBernstein

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AllianceBernstein Holding LP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental drivers, AllianceBernstein may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BlackRock Long Term

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Long Term Municipal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with AllianceBernstein and BlackRock Long

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

The idea behind AllianceBernstein Holding LP and BlackRock Long Term Municipal 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.