Correlation Between Marshfield Centrated and Alliancebernstein

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

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

Diversification Opportunities for Marshfield Centrated and Alliancebernstein

0.39

Correlation Coefficient

Marshfield Centrated  Alliancebernstein

Weak diversification

The 3 months correlation between Marshfield and Alliancebernstein is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Marshfield Centrated Opportuni and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Marshfield Centrated 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 Marshfield Centrated Opportunity 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 Marshfield Centrated i.e., Marshfield Centrated and Alliancebernstein go up and down completely randomly.

Pair Corralation between Marshfield Centrated and Alliancebernstein

Assuming the 90 days horizon Marshfield Centrated Opportunity is expected to generate 1.12 times more return on investment than Alliancebernstein. However, Marshfield Centrated is 1.12 times more volatile than Alliancebernstein Global High. It trades about 0.1 of its potential returns per unit of risk. Alliancebernstein Global High is currently generating about 0.1 per unit of risk. If you would invest  2,557  in Marshfield Centrated Opportunity on September 30, 2024 and sell it today you would earn a total of  632.00  from holding Marshfield Centrated Opportunity or generate 24.72% return on investment over 90 days.

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

Marshfield Centrated Opportuni  vs.  Alliancebernstein Global High

Marshfield Centrated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marshfield Centrated Opportunity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Marshfield Centrated 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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Marshfield Centrated and Alliancebernstein

The main advantage of trading using opposite Marshfield Centrated and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marshfield Centrated 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 Marshfield Centrated Opportunity 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.