Correlation Between International Fund and Alliancebernstein

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

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

Diversification Opportunities for International Fund and Alliancebernstein

0.74

Correlation Coefficient

International Fund  Alliancebernstein

Poor diversification

The 3 months correlation between International and Alliancebernstein is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding International Fund Internation and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and International Fund 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 International Fund International 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 International Fund i.e., International Fund and Alliancebernstein go up and down completely randomly.

Pair Corralation between International Fund and Alliancebernstein

Assuming the 90 days horizon International Fund International is expected to under-perform the Alliancebernstein. In addition to that, International Fund is 1.6 times more volatile than Alliancebernstein Global High. It trades about -0.2 of its total potential returns per unit of risk. Alliancebernstein Global High is currently generating about -0.07 per unit of volatility. If you would invest  1,085  in Alliancebernstein Global High on October 12, 2024 and sell it today you would lose (21.00) from holding Alliancebernstein Global High or give up 1.94% of portfolio value over 90 days.

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

International Fund Internation  vs.  Alliancebernstein Global High

International Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Fund International has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund 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 International Fund and Alliancebernstein

The main advantage of trading using opposite International Fund and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Fund 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 International Fund International 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.