Correlation Between The Hartford and Alliancebernstein

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

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

Diversification Opportunities for The Hartford and Alliancebernstein

0.0

Correlation Coefficient

The Hartford  Alliancebernstein

Pay attention - limited upside

The 3 months correlation between The and Alliancebernstein is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford International and Alliancebernstein Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein Bond and The Hartford 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 The Hartford International 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 The Hartford i.e., The Hartford and Alliancebernstein go up and down completely randomly.

Pair Corralation between The Hartford and Alliancebernstein

Assuming the 90 days horizon The Hartford is expected to generate 94.83 times less return on investment than Alliancebernstein. But when comparing it to its historical volatility, The Hartford International is 57.33 times less risky than Alliancebernstein. It trades about 0.05 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

The Hartford International  vs.  Alliancebernstein Bond

Hartford Interna

Risk-Adjusted Performance

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Very Weak

Over the last 90 days The Hartford International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, The Hartford 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 The Hartford and Alliancebernstein

The main advantage of trading using opposite The Hartford and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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 The Hartford International 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.