Correlation Between Alliancebernstein and Gabelli Dividend

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

Diversification Opportunities for Alliancebernstein and Gabelli Dividend

-0.06

Correlation Coefficient

Alliancebernstein  Gabelli Dividend

Good diversification

The 3 months correlation between Alliancebernstein and Gabelli is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Gabelli Dividend Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Dividend Income 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 Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Dividend Income has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Gabelli Dividend go up and down completely randomly.

Pair Corralation between Alliancebernstein and Gabelli Dividend

Considering the 90-day investment horizon Alliancebernstein is expected to generate 1.93 times less return on investment than Gabelli Dividend. But when comparing it to its historical volatility, Alliancebernstein National Municipal is 1.44 times less risky than Gabelli Dividend. It trades about 0.08 of its potential returns per unit of risk. Gabelli Dividend Income is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,125  in Gabelli Dividend Income on September 24, 2024 and sell it today you would earn a total of  292.00  from holding Gabelli Dividend Income or generate 13.74% return on investment over 90 days.

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

Alliancebernstein National Mun  vs.  Gabelli Dividend Income

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.

Gabelli Dividend Income

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Dividend Income are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable fundamental indicators, Gabelli Dividend is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Alliancebernstein and Gabelli Dividend

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

The idea behind Alliancebernstein National Municipal and Gabelli Dividend Income 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 Global Correlations module to find global opportunities by holding instruments from different markets.