Correlation Between Alliancebernstein and Voya Large

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

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

Diversification Opportunities for Alliancebernstein and Voya Large

0.4

Correlation Coefficient

Alliancebernstein  Voya Large

Very weak diversification

The 3 months correlation between Alliancebernstein and Voya is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Voya Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap and Alliancebernstein 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 Alliancebernstein National Municipalome are associated (or correlated) with Voya Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Voya Large go up and down completely randomly.

Pair Corralation between Alliancebernstein and Voya Large

Assuming the 90 days horizon Alliancebernstein National Municipalome is expected to generate 0.29 times more return on investment than Voya Large. However, Alliancebernstein National Municipalome is 3.45 times less risky than Voya Large. It trades about -0.04 of its potential returns per unit of risk. Voya Large Cap Growth is currently generating about -0.13 per unit of risk. If you would invest  1,239  in Alliancebernstein National Municipalome on December 24, 2024 and sell it today you would lose (13.00) from holding Alliancebernstein National Municipalome or give up 1.05% of portfolio value over 90 days.

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

Alliancebernstein National Mun  vs.  Voya Large Cap Growth

Alliancebernstein

Risk-Adjusted Performance

Very Weak

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

Voya Large Cap

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Alliancebernstein and Voya Large

The main advantage of trading using opposite Alliancebernstein and Voya Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Voya Large 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 Voya Large will offset losses from the drop in Voya Large's long position.

The idea behind Alliancebernstein National Municipalome and Voya Large Cap Growth 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.