Correlation Between Alliancebernstein and Growth Allocation

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

Diversification Opportunities for Alliancebernstein and Growth Allocation

0.21

Correlation Coefficient

Alliancebernstein  Growth Allocation

Modest diversification

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

Pair Corralation between Alliancebernstein and Growth Allocation

Considering the 90-day investment horizon Alliancebernstein Global High is expected to generate 1.21 times more return on investment than Growth Allocation. However, Alliancebernstein is 1.21 times more volatile than Growth Allocation Index. It trades about 0.09 of its potential returns per unit of risk. Growth Allocation Index is currently generating about 0.11 per unit of risk. If you would invest  800.00  in Alliancebernstein Global High on September 17, 2024 and sell it today you would earn a total of  286.00  from holding Alliancebernstein Global High or generate 35.75% return on investment over 90 days.

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

Alliancebernstein Global High  vs.  Growth Allocation Index

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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Growth Allocation Index

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Growth Allocation Index are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Growth Allocation 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 Growth Allocation

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

The idea behind Alliancebernstein Global High and Growth Allocation Index 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.