Correlation Between Macquariefirst and Alliancebernstein

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

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

Diversification Opportunities for Macquariefirst and Alliancebernstein

-0.47

Correlation Coefficient

Macquariefirst  Alliancebernstein

Very good diversification

The 3 months correlation between Macquariefirst and Alliancebernstein is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Macquariefirst Tr Global and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Macquariefirst 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 Macquariefirst Tr Global 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 Macquariefirst i.e., Macquariefirst and Alliancebernstein go up and down completely randomly.

Pair Corralation between Macquariefirst and Alliancebernstein

If you would invest  845.00  in Macquariefirst Tr Global on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Macquariefirst Tr Global or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Macquariefirst Tr Global  vs.  Alliancebernstein National Mun

Macquariefirst Tr Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Macquariefirst Tr Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, Macquariefirst is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 Macquariefirst and Alliancebernstein

The main advantage of trading using opposite Macquariefirst and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquariefirst 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 Macquariefirst Tr Global 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.