Correlation Between Alliancebernstein and Invesco Technology

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

Diversification Opportunities for Alliancebernstein and Invesco Technology

-0.46

Correlation Coefficient

Alliancebernstein  Invesco Technology

Very good diversification

The 3 months correlation between Alliancebernstein and Invesco is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Invesco Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Technology 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 Invesco Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Technology has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Invesco Technology go up and down completely randomly.

Pair Corralation between Alliancebernstein and Invesco Technology

Considering the 90-day investment horizon Alliancebernstein National Municipal is expected to under-perform the Invesco Technology. But the fund apears to be less risky and, when comparing its historical volatility, Alliancebernstein National Municipal is 1.93 times less risky than Invesco Technology. The fund trades about -0.05 of its potential returns per unit of risk. The Invesco Technology Fund is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  6,023  in Invesco Technology Fund on September 16, 2024 and sell it today you would earn a total of  1,251  from holding Invesco Technology Fund or generate 20.77% 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.  Invesco Technology 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.

Invesco Technology

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Technology 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, Invesco Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alliancebernstein and Invesco Technology

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

The idea behind Alliancebernstein National Municipal and Invesco Technology 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.