Correlation Between Virtus Kar and Alliancebernstein

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

By analyzing existing cross correlation between Virtus Kar Small Cap and Alliancebernstein Bond, you can compare the effects of market volatilities on Virtus Kar 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 Virtus Kar with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Kar and Alliancebernstein.

Diversification Opportunities for Virtus Kar and Alliancebernstein

0.0

Correlation Coefficient

Virtus Kar  Alliancebernstein

Pay attention - limited upside

The 3 months correlation between Virtus and Alliancebernstein is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Kar Small Cap and Alliancebernstein Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein Bond and Virtus Kar 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 Virtus Kar Small Cap 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 Bond has no effect on the direction of Virtus Kar i.e., Virtus Kar and Alliancebernstein go up and down completely randomly.

Pair Corralation between Virtus Kar and Alliancebernstein

Assuming the 90 days horizon Virtus Kar is expected to generate 1392.12 times less return on investment than Alliancebernstein. But when comparing it to its historical volatility, Virtus Kar Small Cap is 34.02 times less risky than Alliancebernstein. It trades about 0.0 of its potential returns per unit of risk. Alliancebernstein Bond is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  416.00  in Alliancebernstein Bond on October 24, 2024 and sell it today you would lose (316.00) from holding Alliancebernstein Bond or give up 75.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	50.51%
Values	Daily Returns

Virtus Kar Small Cap  vs.  Alliancebernstein Bond

Virtus Kar Small

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Virtus Kar Small Cap 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 Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Virtus Kar and Alliancebernstein

The main advantage of trading using opposite Virtus Kar and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Kar 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 Virtus Kar Small Cap and Alliancebernstein Bond 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.