Correlation Between Alliancebernstein and Guidemark Large

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

Diversification Opportunities for Alliancebernstein and Guidemark Large

0.64

Correlation Coefficient

Alliancebernstein  Guidemark Large

Poor diversification

The 3 months correlation between Alliancebernstein and Guidemark is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Guidemark Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Large 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 Guidemark Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Large Cap has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Guidemark Large go up and down completely randomly.

Pair Corralation between Alliancebernstein and Guidemark Large

Considering the 90-day investment horizon Alliancebernstein Global High is expected to generate 0.53 times more return on investment than Guidemark Large. However, Alliancebernstein Global High is 1.9 times less risky than Guidemark Large. It trades about -0.06 of its potential returns per unit of risk. Guidemark Large Cap 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	Significant
Accuracy	100.0%
Values	Daily Returns

Alliancebernstein Global High  vs.  Guidemark Large 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.

Guidemark Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guidemark Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Alliancebernstein and Guidemark Large

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

The idea behind Alliancebernstein Global High and Guidemark Large 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.