Correlation Between Alliancebernstein and Sterling Capital

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

Diversification Opportunities for Alliancebernstein and Sterling Capital

-0.08

Correlation Coefficient

Alliancebernstein  Sterling Capital

Good diversification

The 3 months correlation between Alliancebernstein and Sterling is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Sterling Capital Stratton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Stratton 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Stratton has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Sterling Capital go up and down completely randomly.

Pair Corralation between Alliancebernstein and Sterling Capital

Considering the 90-day investment horizon Alliancebernstein Global High is expected to generate 0.61 times more return on investment than Sterling Capital. However, Alliancebernstein Global High is 1.65 times less risky than Sterling Capital. It trades about 0.09 of its potential returns per unit of risk. Sterling Capital Stratton is currently generating about 0.01 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Alliancebernstein Global High  vs.  Sterling Capital Stratton

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.

Sterling Capital Stratton

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sterling Capital Stratton has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental 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 Sterling Capital

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

The idea behind Alliancebernstein Global High and Sterling Capital Stratton 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.