Correlation Between Champlain Small and Alliancebernstein

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

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

Diversification Opportunities for Champlain Small and Alliancebernstein

0.0

Correlation Coefficient

Champlain Small  Alliancebernstein

Pay attention - limited upside

The 3 months correlation between Champlain and Alliancebernstein is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Alliancebernstein Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein Bond and Champlain Small 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 Champlain Small 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 Bond has no effect on the direction of Champlain Small i.e., Champlain Small and Alliancebernstein go up and down completely randomly.

Pair Corralation between Champlain Small and Alliancebernstein

Assuming the 90 days horizon Champlain Small is expected to generate 198.33 times less return on investment than Alliancebernstein. But when comparing it to its historical volatility, Champlain Small is 35.78 times less risky than Alliancebernstein. It trades about 0.01 of its potential returns per unit of risk. Alliancebernstein Bond is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  426.00  in Alliancebernstein Bond on October 25, 2024 and sell it today you would lose (326.00) from holding Alliancebernstein Bond or give up 76.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	50.51%
Values	Daily Returns

Champlain Small  vs.  Alliancebernstein Bond

Champlain Small

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Champlain Small are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Champlain Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alliancebernstein Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic 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 Champlain Small and Alliancebernstein

The main advantage of trading using opposite Champlain Small and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small 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 Champlain Small and Alliancebernstein Bond 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.