Correlation Between Cargile Fund and Alliancebernstein

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

By analyzing existing cross correlation between Cargile Fund and Alliancebernstein Global High, you can compare the effects of market volatilities on Cargile Fund 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 Cargile Fund with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cargile Fund and Alliancebernstein.

Diversification Opportunities for Cargile Fund and Alliancebernstein

-0.16

Correlation Coefficient

Cargile Fund  Alliancebernstein

Good diversification

The 3 months correlation between Cargile and Alliancebernstein is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cargile Fund and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Cargile Fund 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 Cargile Fund 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 Cargile Fund i.e., Cargile Fund and Alliancebernstein go up and down completely randomly.

Pair Corralation between Cargile Fund and Alliancebernstein

Assuming the 90 days horizon Cargile Fund is expected to generate 5.4 times less return on investment than Alliancebernstein. But when comparing it to its historical volatility, Cargile Fund is 1.14 times less risky than Alliancebernstein. It trades about 0.01 of its potential returns per unit of risk. Alliancebernstein Global High is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  860.00  in Alliancebernstein Global High on October 4, 2024 and sell it today you would earn a total of  213.00  from holding Alliancebernstein Global High or generate 24.77% return on investment over 90 days.

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

Cargile Fund  vs.  Alliancebernstein Global High

Cargile Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cargile Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Cargile Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Cargile Fund and Alliancebernstein

The main advantage of trading using opposite Cargile Fund and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cargile Fund 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 Cargile Fund and Alliancebernstein Global High 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.