Correlation Between AllianceBernstein and Silvercrest Asset

Can any of the company-specific risk be diversified away by investing in both AllianceBernstein and Silvercrest Asset 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 Silvercrest Asset 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 Silvercrest Asset Management, you can compare the effects of market volatilities on AllianceBernstein and Silvercrest Asset 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 Silvercrest Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianceBernstein and Silvercrest Asset.

Diversification Opportunities for AllianceBernstein and Silvercrest Asset

-0.05

Correlation Coefficient

AllianceBernstein  Silvercrest Asset

Good diversification

The 3 months correlation between AllianceBernstein and Silvercrest is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and Silvercrest Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercrest Asset 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 Silvercrest Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercrest Asset has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and Silvercrest Asset go up and down completely randomly.

Pair Corralation between AllianceBernstein and Silvercrest Asset

Allowing for the 90-day total investment horizon AllianceBernstein is expected to generate 1.46 times less return on investment than Silvercrest Asset. But when comparing it to its historical volatility, AllianceBernstein Holding LP is 1.1 times less risky than Silvercrest Asset. It trades about 0.04 of its potential returns per unit of risk. Silvercrest Asset Management is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,715  in Silvercrest Asset Management on October 22, 2024 and sell it today you would earn a total of  84.00  from holding Silvercrest Asset Management or generate 4.9% return on investment over 90 days.

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

AllianceBernstein Holding LP  vs.  Silvercrest Asset Management

AllianceBernstein

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AllianceBernstein Holding LP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, AllianceBernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Silvercrest Asset

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Silvercrest Asset Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Silvercrest Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AllianceBernstein and Silvercrest Asset

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

The idea behind AllianceBernstein Holding LP and Silvercrest Asset Management 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.