Correlation Between BlackRock Utility and Alliancebernstein

Can any of the company-specific risk be diversified away by investing in both BlackRock Utility and Alliancebernstein 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 BlackRock Utility and Alliancebernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BlackRock Utility Infrastructure and Alliancebernstein National Municipal, you can compare the effects of market volatilities on BlackRock Utility and Alliancebernstein 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 BlackRock Utility with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Utility and Alliancebernstein.

Diversification Opportunities for BlackRock Utility and Alliancebernstein

0.75

Correlation Coefficient

BlackRock Utility  Alliancebernstein

Poor diversification

The 3 months correlation between BlackRock and Alliancebernstein is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Utility Infrastructu and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and BlackRock Utility 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 BlackRock Utility Infrastructure are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of BlackRock Utility i.e., BlackRock Utility and Alliancebernstein go up and down completely randomly.

Pair Corralation between BlackRock Utility and Alliancebernstein

Considering the 90-day investment horizon BlackRock Utility Infrastructure is expected to under-perform the Alliancebernstein. In addition to that, BlackRock Utility is 1.41 times more volatile than Alliancebernstein National Municipal. It trades about -0.19 of its total potential returns per unit of risk. Alliancebernstein National Municipal is currently generating about -0.19 per unit of volatility. If you would invest  1,126  in Alliancebernstein National Municipal on September 24, 2024 and sell it today you would lose (29.00) from holding Alliancebernstein National Municipal or give up 2.58% of portfolio value over 90 days.

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

BlackRock Utility Infrastructu  vs.  Alliancebernstein National Mun

BlackRock Utility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Utility Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, BlackRock Utility is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein National Municipal has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong technical and fundamental indicators, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BlackRock Utility and Alliancebernstein

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

The idea behind BlackRock Utility Infrastructure and Alliancebernstein National Municipal 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.

Check out your portfolio center.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.