Correlation Between Alliancebernstein and Horizon Funds

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

By analyzing existing cross correlation between Alliancebernstein Global Highome and Horizon Funds , you can compare the effects of market volatilities on Alliancebernstein and Horizon Funds 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 Horizon Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Horizon Funds.

Diversification Opportunities for Alliancebernstein and Horizon Funds

0.71

Correlation Coefficient

Alliancebernstein  Horizon Funds

Poor diversification

The 3 months correlation between Alliancebernstein and Horizon is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global Higho and Horizon Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Funds 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 Global Highome are associated (or correlated) with Horizon Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Funds has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Horizon Funds go up and down completely randomly.

Pair Corralation between Alliancebernstein and Horizon Funds

Assuming the 90 days horizon Alliancebernstein Global Highome is expected to under-perform the Horizon Funds. In addition to that, Alliancebernstein is 1.28 times more volatile than Horizon Funds . It trades about -0.02 of its total potential returns per unit of risk. Horizon Funds is currently generating about 0.01 per unit of volatility. If you would invest  4,718  in Horizon Funds on December 26, 2024 and sell it today you would earn a total of  6.00  from holding Horizon Funds or generate 0.13% return on investment over 90 days.

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

Alliancebernstein Global Higho  vs.  Horizon Funds

Alliancebernstein

Risk-Adjusted Performance

Very Weak

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

Horizon Funds

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Funds are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Horizon Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alliancebernstein and Horizon Funds

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

The idea behind Alliancebernstein Global Highome and Horizon Funds 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.

Check out your portfolio center.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..