Correlation Between Alliancebernstein and Midas Special

Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Midas Special 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 Midas Special 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 Midas Special Fund, you can compare the effects of market volatilities on Alliancebernstein and Midas Special 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 Midas Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Midas Special.

Diversification Opportunities for Alliancebernstein and Midas Special

0.7

Correlation Coefficient

Alliancebernstein  Midas Special

Poor diversification

The 3 months correlation between Alliancebernstein and Midas is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global Higho and Midas Special Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midas Special 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 Midas Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midas Special has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Midas Special go up and down completely randomly.

Pair Corralation between Alliancebernstein and Midas Special

Assuming the 90 days horizon Alliancebernstein Global Highome is expected to generate 0.2 times more return on investment than Midas Special. However, Alliancebernstein Global Highome is 5.06 times less risky than Midas Special. It trades about -0.04 of its potential returns per unit of risk. Midas Special Fund is currently generating about -0.06 per unit of risk. If you would invest  1,133  in Alliancebernstein Global Highome on December 24, 2024 and sell it today you would lose (6.00) from holding Alliancebernstein Global Highome or give up 0.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Alliancebernstein Global Higho  vs.  Midas Special Fund

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.

Midas Special

Risk-Adjusted Performance

Very Weak

Over the last 90 days Midas Special Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Midas Special 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 Midas Special

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

The idea behind Alliancebernstein Global Highome and Midas Special Fund 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .