Correlation Between Alliancebernstein and Shelton Core

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

Diversification Opportunities for Alliancebernstein and Shelton Core

-0.21

Correlation Coefficient

Alliancebernstein  Shelton Core

Very good diversification

The 3 months correlation between Alliancebernstein and Shelton is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Shelton E Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton E Value 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 Shelton Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton E Value has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Shelton Core go up and down completely randomly.

Pair Corralation between Alliancebernstein and Shelton Core

Considering the 90-day investment horizon Alliancebernstein is expected to generate 15.77 times less return on investment than Shelton Core. But when comparing it to its historical volatility, Alliancebernstein Global High is 1.28 times less risky than Shelton Core. It trades about 0.02 of its potential returns per unit of risk. Shelton E Value is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,575  in Shelton E Value on September 5, 2024 and sell it today you would earn a total of  127.00  from holding Shelton E Value or generate 8.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Alliancebernstein Global High  vs.  Shelton E Value

Alliancebernstein

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alliancebernstein Global High are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. 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.

Shelton E Value

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shelton E Value are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Shelton Core may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Alliancebernstein and Shelton Core

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

The idea behind Alliancebernstein Global High and Shelton E Value 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.