Correlation Between Alliancebernstein and Gmo Alternative

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

Diversification Opportunities for Alliancebernstein and Gmo Alternative

0.38

Correlation Coefficient

Alliancebernstein  Gmo Alternative

Weak diversification

The 3 months correlation between Alliancebernstein and Gmo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Gmo Alternative Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Alternative Allo 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 Gmo Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Alternative Allo has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Gmo Alternative go up and down completely randomly.

Pair Corralation between Alliancebernstein and Gmo Alternative

Considering the 90-day investment horizon Alliancebernstein Global High is expected to generate 1.03 times more return on investment than Gmo Alternative. However, Alliancebernstein is 1.03 times more volatile than Gmo Alternative Allocation. It trades about -0.06 of its potential returns per unit of risk. Gmo Alternative Allocation is currently generating about -0.2 per unit of risk. If you would invest  1,094  in Alliancebernstein Global High on October 6, 2024 and sell it today you would lose (18.00) from holding Alliancebernstein Global High or give up 1.65% of portfolio value over 90 days.

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

Alliancebernstein Global High  vs.  Gmo Alternative Allocation

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.

Gmo Alternative Allo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gmo Alternative Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Gmo Alternative 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 Gmo Alternative

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

The idea behind Alliancebernstein Global High and Gmo Alternative Allocation 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.