Correlation Between Alliancebernstein and Ambrus Core

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

Diversification Opportunities for Alliancebernstein and Ambrus Core

0.87

Correlation Coefficient

Alliancebernstein  Ambrus Core

Very poor diversification

The 3 months correlation between Alliancebernstein and Ambrus is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Ambrus Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambrus Core Bond 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 Ambrus Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambrus Core Bond has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Ambrus Core go up and down completely randomly.

Pair Corralation between Alliancebernstein and Ambrus Core

Considering the 90-day investment horizon Alliancebernstein National Municipal is expected to under-perform the Ambrus Core. In addition to that, Alliancebernstein is 3.81 times more volatile than Ambrus Core Bond. It trades about -0.05 of its total potential returns per unit of risk. Ambrus Core Bond is currently generating about -0.09 per unit of volatility. If you would invest  1,007  in Ambrus Core Bond on September 15, 2024 and sell it today you would lose (10.00) from holding Ambrus Core Bond or give up 0.99% of portfolio value over 90 days.

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

Alliancebernstein National Mun  vs.  Ambrus Core Bond

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.

Ambrus Core Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ambrus Core Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Ambrus Core 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 Ambrus Core

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

The idea behind Alliancebernstein National Municipal and Ambrus Core Bond 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.