Correlation Between Alliancebernstein and Mainstay Mon

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

Diversification Opportunities for Alliancebernstein and Mainstay Mon

-0.45

Correlation Coefficient

Alliancebernstein  Mainstay Mon

Very good diversification

The 3 months correlation between Alliancebernstein and Mainstay is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global Higho and Mainstay Mon Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mon Stock 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 Mainstay Mon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Mon Stock has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Mainstay Mon go up and down completely randomly.

Pair Corralation between Alliancebernstein and Mainstay Mon

Assuming the 90 days horizon Alliancebernstein Global Highome is expected to under-perform the Mainstay Mon. But the mutual fund apears to be less risky and, when comparing its historical volatility, Alliancebernstein Global Highome is 3.18 times less risky than Mainstay Mon. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Mainstay Mon Stock is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3,345  in Mainstay Mon Stock on December 26, 2024 and sell it today you would earn a total of  152.00  from holding Mainstay Mon Stock or generate 4.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	63.33%
Values	Daily Returns

Alliancebernstein Global Higho  vs.  Mainstay Mon Stock

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.

Mainstay Mon Stock

Risk-Adjusted Performance

Good

Over the last 90 days Mainstay Mon Stock has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak fundamental drivers, Mainstay Mon may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Alliancebernstein and Mainstay Mon

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

The idea behind Alliancebernstein Global Highome and Mainstay Mon Stock 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.