Correlation Between Alliancebernstein and Alger Spectra

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

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

Diversification Opportunities for Alliancebernstein and Alger Spectra

-0.44

Correlation Coefficient

Alliancebernstein  Alger Spectra

Very good diversification

The 3 months correlation between Alliancebernstein and Alger is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Alger Spectra Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra 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 National Municipal are associated (or correlated) with Alger Spectra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Spectra has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Alger Spectra go up and down completely randomly.

Pair Corralation between Alliancebernstein and Alger Spectra

Considering the 90-day investment horizon Alliancebernstein National Municipal is expected to under-perform the Alger Spectra. But the fund apears to be less risky and, when comparing its historical volatility, Alliancebernstein National Municipal is 1.75 times less risky than Alger Spectra. The fund trades about -0.04 of its potential returns per unit of risk. The Alger Spectra Fund is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  2,812  in Alger Spectra Fund on September 12, 2024 and sell it today you would earn a total of  494.00  from holding Alger Spectra Fund or generate 17.57% return on investment over 90 days.

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

Alliancebernstein National Mun  vs.  Alger Spectra Fund

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein National Municipal has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong technical and fundamental indicators, Alliancebernstein is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Alger Spectra

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Spectra Fund are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Alger Spectra showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alliancebernstein and Alger Spectra

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

The idea behind Alliancebernstein National Municipal and Alger Spectra 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.