Correlation Between First Industrial and AllianceBernstein

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

By analyzing existing cross correlation between First Industrial Realty and AllianceBernstein Holding LP, you can compare the effects of market volatilities on First Industrial 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 First Industrial with a short position of AllianceBernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and AllianceBernstein.

Diversification Opportunities for First Industrial and AllianceBernstein

0.35

Correlation Coefficient

First Industrial  AllianceBernstein

Weak diversification

The 3 months correlation between First and AllianceBernstein is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and AllianceBernstein Holding LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianceBernstein and First Industrial 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 First Industrial Realty 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 First Industrial i.e., First Industrial and AllianceBernstein go up and down completely randomly.

Pair Corralation between First Industrial and AllianceBernstein

Allowing for the 90-day total investment horizon First Industrial is expected to generate 1.15 times less return on investment than AllianceBernstein. But when comparing it to its historical volatility, First Industrial Realty is 1.59 times less risky than AllianceBernstein. It trades about 0.1 of its potential returns per unit of risk. AllianceBernstein Holding LP is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,543  in AllianceBernstein Holding LP on December 30, 2024 and sell it today you would earn a total of  294.00  from holding AllianceBernstein Holding LP or generate 8.3% return on investment over 90 days.

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

First Industrial Realty  vs.  AllianceBernstein Holding LP

First Industrial Realty

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Industrial Realty are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, First Industrial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

AllianceBernstein

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AllianceBernstein Holding LP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental drivers, AllianceBernstein may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with First Industrial and AllianceBernstein

The main advantage of trading using opposite First Industrial and AllianceBernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial 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 First Industrial Realty and AllianceBernstein Holding LP 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.