Correlation Between Tri Continental and Alliancebernstein

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

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

Diversification Opportunities for Tri Continental and Alliancebernstein

0.58

Correlation Coefficient

Tri Continental  Alliancebernstein

Very weak diversification

The 3 months correlation between Tri and Alliancebernstein is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Tri Continental Closed and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Tri Continental 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 Tri Continental Closed 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 Tri Continental i.e., Tri Continental and Alliancebernstein go up and down completely randomly.

Pair Corralation between Tri Continental and Alliancebernstein

Allowing for the 90-day total investment horizon Tri Continental Closed is expected to under-perform the Alliancebernstein. In addition to that, Tri Continental is 2.14 times more volatile than Alliancebernstein Global High. It trades about -0.05 of its total potential returns per unit of risk. Alliancebernstein Global High is currently generating about -0.08 per unit of volatility. If you would invest  1,090  in Alliancebernstein Global High on October 10, 2024 and sell it today you would lose (23.00) from holding Alliancebernstein Global High or give up 2.11% of portfolio value over 90 days.

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

Tri Continental Closed  vs.  Alliancebernstein Global High

Tri Continental Closed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tri Continental Closed has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Tri Continental 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 Tri Continental and Alliancebernstein

The main advantage of trading using opposite Tri Continental and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tri Continental 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 Tri Continental Closed 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.