Correlation Between Alliancebernstein and Precious Metals

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

Diversification Opportunities for Alliancebernstein and Precious Metals

0.2

Correlation Coefficient

Alliancebernstein  Precious Metals

Modest diversification

The 3 months correlation between Alliancebernstein and Precious is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global Higho and Precious Metals Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals Ultr 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 Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals Ultr has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Precious Metals go up and down completely randomly.

Pair Corralation between Alliancebernstein and Precious Metals

Assuming the 90 days horizon Alliancebernstein Global Highome is expected to generate 0.06 times more return on investment than Precious Metals. However, Alliancebernstein Global Highome is 18.11 times less risky than Precious Metals. It trades about -0.04 of its potential returns per unit of risk. Precious Metals Ultrasector is currently generating about -0.1 per unit of risk. If you would invest  1,136  in Alliancebernstein Global Highome on October 10, 2024 and sell it today you would lose (5.00) from holding Alliancebernstein Global Highome or give up 0.44% of portfolio value over 90 days.

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

Alliancebernstein Global Higho  vs.  Precious Metals Ultrasector

Alliancebernstein

Risk-Adjusted Performance

0 of 100

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.

Precious Metals Ultr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Precious Metals Ultrasector has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Alliancebernstein and Precious Metals

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

The idea behind Alliancebernstein Global Highome and Precious Metals Ultrasector 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.