Correlation Between Alliancebernstein and Cargile Fund

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

Diversification Opportunities for Alliancebernstein and Cargile Fund

-0.44

Correlation Coefficient

Alliancebernstein  Cargile Fund

Very good diversification

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

Pair Corralation between Alliancebernstein and Cargile Fund

Considering the 90-day investment horizon Alliancebernstein National Municipal is expected to under-perform the Cargile Fund. In addition to that, Alliancebernstein is 3.31 times more volatile than Cargile Fund. It trades about -0.13 of its total potential returns per unit of risk. Cargile Fund is currently generating about 0.0 per unit of volatility. If you would invest  910.00  in Cargile Fund on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Cargile Fund or generate 0.0% 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.  Cargile 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 current stock price disturbance, may contribute to short-term losses for the investors.

Cargile Fund

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Alliancebernstein and Cargile Fund

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

The idea behind Alliancebernstein National Municipal and Cargile 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 Transaction History module to view history of all your transactions and understand their impact on performance.