Correlation Between Stellus Capital and AllianceBernstein

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

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

Diversification Opportunities for Stellus Capital and AllianceBernstein

0.57

Correlation Coefficient

Stellus Capital  AllianceBernstein

Very weak diversification

The 3 months correlation between Stellus and AllianceBernstein is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Stellus Capital Investment and AllianceBernstein Holding LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianceBernstein and Stellus Capital 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 Stellus Capital Investment 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 Stellus Capital i.e., Stellus Capital and AllianceBernstein go up and down completely randomly.

Pair Corralation between Stellus Capital and AllianceBernstein

Considering the 90-day investment horizon Stellus Capital Investment is expected to generate 0.69 times more return on investment than AllianceBernstein. However, Stellus Capital Investment is 1.45 times less risky than AllianceBernstein. It trades about 0.03 of its potential returns per unit of risk. AllianceBernstein Holding LP is currently generating about 0.02 per unit of risk. If you would invest  1,212  in Stellus Capital Investment on October 5, 2024 and sell it today you would earn a total of  177.00  from holding Stellus Capital Investment or generate 14.6% return on investment over 90 days.

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

Stellus Capital Investment  vs.  AllianceBernstein Holding LP

Stellus Capital Inve

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stellus Capital Investment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Stellus Capital is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

AllianceBernstein

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AllianceBernstein Holding LP are ranked lower than 7 (%) 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 February 2025.

Pair Trading with Stellus Capital and AllianceBernstein

The main advantage of trading using opposite Stellus Capital and AllianceBernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellus Capital 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 Stellus Capital Investment 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .