Correlation Between Alliancebernstein and Inverse Sp

Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Inverse Sp 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 Inverse Sp 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 Inverse Sp 500, you can compare the effects of market volatilities on Alliancebernstein and Inverse Sp 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 Inverse Sp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Inverse Sp.

Diversification Opportunities for Alliancebernstein and Inverse Sp

0.13

Correlation Coefficient

Alliancebernstein  Inverse Sp

Average diversification

The 3 months correlation between Alliancebernstein and Inverse is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Inverse Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Sp 500 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 Inverse Sp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Sp 500 has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Inverse Sp go up and down completely randomly.

Pair Corralation between Alliancebernstein and Inverse Sp

Considering the 90-day investment horizon Alliancebernstein Global High is expected to generate 0.37 times more return on investment than Inverse Sp. However, Alliancebernstein Global High is 2.69 times less risky than Inverse Sp. It trades about -0.01 of its potential returns per unit of risk. Inverse Sp 500 is currently generating about -0.19 per unit of risk. If you would invest  1,087  in Alliancebernstein Global High on September 14, 2024 and sell it today you would lose (4.00) from holding Alliancebernstein Global High or give up 0.37% of portfolio value over 90 days.

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

Alliancebernstein Global High  vs.  Inverse Sp 500

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.

Inverse Sp 500

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inverse Sp 500 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fragile performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Alliancebernstein and Inverse Sp

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

The idea behind Alliancebernstein Global High and Inverse Sp 500 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.