Correlation Between Alliancebernstein and Alger Mid

Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Alger Mid 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 Alger Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alliancebernstein Global High and Alger Mid Cap, you can compare the effects of market volatilities on Alliancebernstein and Alger Mid 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 Alger Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Alger Mid.

Diversification Opportunities for Alliancebernstein and Alger Mid

0.4

Correlation Coefficient

Alliancebernstein  Alger Mid

Very weak diversification

The 3 months correlation between Alliancebernstein and Alger is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Alger Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Mid Cap 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 Global High are associated (or correlated) with Alger Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Mid Cap has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Alger Mid go up and down completely randomly.

Pair Corralation between Alliancebernstein and Alger Mid

Considering the 90-day investment horizon Alliancebernstein is expected to generate 103.3 times less return on investment than Alger Mid. But when comparing it to its historical volatility, Alliancebernstein Global High is 2.81 times less risky than Alger Mid. It trades about 0.0 of its potential returns per unit of risk. Alger Mid Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,994  in Alger Mid Cap on October 21, 2024 and sell it today you would earn a total of  121.00  from holding Alger Mid Cap or generate 6.07% return on investment over 90 days.

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

Alliancebernstein Global High  vs.  Alger Mid Cap

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein Global High has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Alger Mid Cap

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Mid Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Alger Mid may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Alliancebernstein and Alger Mid

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

The idea behind Alliancebernstein Global High and Alger Mid Cap 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.