Correlation Between Alliancebernstein and Gabelli Equity

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

Diversification Opportunities for Alliancebernstein and Gabelli Equity

0.07

Correlation Coefficient

Alliancebernstein  Gabelli Equity

Significant diversification

The 3 months correlation between Alliancebernstein and Gabelli is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and The Gabelli Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity 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 Gabelli Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Gabelli Equity go up and down completely randomly.

Pair Corralation between Alliancebernstein and Gabelli Equity

Considering the 90-day investment horizon Alliancebernstein National Municipal is expected to generate 1.07 times more return on investment than Gabelli Equity. However, Alliancebernstein is 1.07 times more volatile than The Gabelli Equity. It trades about 0.05 of its potential returns per unit of risk. The Gabelli Equity is currently generating about 0.04 per unit of risk. If you would invest  1,070  in Alliancebernstein National Municipal on December 27, 2024 and sell it today you would earn a total of  16.00  from holding Alliancebernstein National Municipal or generate 1.5% return on investment over 90 days.

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

Alliancebernstein National Mun  vs.  The Gabelli Equity

Alliancebernstein

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alliancebernstein National Municipal are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. 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.

Gabelli Equity

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Equity are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, Gabelli Equity is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Alliancebernstein and Gabelli Equity

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

The idea behind Alliancebernstein National Municipal and The Gabelli Equity 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.