Correlation Between Alliancebernstein and Thornburg Global

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

Diversification Opportunities for Alliancebernstein and Thornburg Global

0.41

Correlation Coefficient

Alliancebernstein  Thornburg Global

Very weak diversification

The 3 months correlation between Alliancebernstein and Thornburg is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Thornburg Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Global Opp 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 Thornburg Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Global Opp has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Thornburg Global go up and down completely randomly.

Pair Corralation between Alliancebernstein and Thornburg Global

Considering the 90-day investment horizon Alliancebernstein National Municipal is expected to under-perform the Thornburg Global. But the fund apears to be less risky and, when comparing its historical volatility, Alliancebernstein National Municipal is 1.03 times less risky than Thornburg Global. The fund trades about -0.05 of its potential returns per unit of risk. The Thornburg Global Opportunities is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3,848  in Thornburg Global Opportunities on September 15, 2024 and sell it today you would lose (19.00) from holding Thornburg Global Opportunities or give up 0.49% of portfolio value over 90 days.

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

Alliancebernstein National Mun  vs.  Thornburg Global Opportunities

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.

Thornburg Global Opp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thornburg Global Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Thornburg Global 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 Thornburg Global

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

The idea behind Alliancebernstein National Municipal and Thornburg Global Opportunities 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.