Correlation Between Oakmark Select and Alliancebernstein

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

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

Diversification Opportunities for Oakmark Select and Alliancebernstein

-0.26

Correlation Coefficient

Oakmark Select  Alliancebernstein

Very good diversification

The 3 months correlation between Oakmark and Alliancebernstein is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Select and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Oakmark Select 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 Oakmark Select 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 Oakmark Select i.e., Oakmark Select and Alliancebernstein go up and down completely randomly.

Pair Corralation between Oakmark Select and Alliancebernstein

Assuming the 90 days horizon Oakmark Select is expected to generate 2.1 times more return on investment than Alliancebernstein. However, Oakmark Select is 2.1 times more volatile than Alliancebernstein Global High. It trades about 0.12 of its potential returns per unit of risk. Alliancebernstein Global High is currently generating about 0.08 per unit of risk. If you would invest  6,969  in Oakmark Select on September 29, 2024 and sell it today you would earn a total of  1,077  from holding Oakmark Select or generate 15.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Oakmark Select  vs.  Alliancebernstein Global High

Oakmark Select

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark Select are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Oakmark Select 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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Oakmark Select and Alliancebernstein

The main advantage of trading using opposite Oakmark Select and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Select 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 Oakmark Select 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.