Correlation Between Ares Acquisition and Alliancebernstein
Can any of the company-specific risk be diversified away by investing in both Ares Acquisition and Alliancebernstein 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 Ares Acquisition and Alliancebernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Acquisition and Alliancebernstein National Municipal, you can compare the effects of market volatilities on Ares Acquisition and Alliancebernstein 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 Ares Acquisition with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Acquisition and Alliancebernstein.
Diversification Opportunities for Ares Acquisition and Alliancebernstein
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ares and Alliancebernstein is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ares Acquisition and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Ares Acquisition 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 Ares Acquisition are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Ares Acquisition i.e., Ares Acquisition and Alliancebernstein go up and down completely randomly.
Pair Corralation between Ares Acquisition and Alliancebernstein
Considering the 90-day investment horizon Ares Acquisition is expected to generate 0.25 times more return on investment than Alliancebernstein. However, Ares Acquisition is 3.95 times less risky than Alliancebernstein. It trades about 0.19 of its potential returns per unit of risk. Alliancebernstein National Municipal is currently generating about 0.04 per unit of risk. If you would invest 1,018 in Ares Acquisition on September 1, 2024 and sell it today you would earn a total of 38.00 from holding Ares Acquisition or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 24.84% |
| Values | Daily Returns |
Ares Acquisition vs. Alliancebernstein National Mun
Performance |
| Timeline |
| Ares Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Alliancebernstein |
Ares Acquisition and Alliancebernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Acquisition and Alliancebernstein
The main advantage of trading using opposite Ares Acquisition and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Acquisition position performs unexpectedly, Alliancebernstein 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 Alliancebernstein will offset losses from the drop in Alliancebernstein's long position.The idea behind Ares Acquisition and Alliancebernstein National Municipal 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.| Alliancebernstein vs. Eaton Vance Short | Alliancebernstein vs. Allianzgi Diversified Income | Alliancebernstein vs. Ares Dynamic Credit | Alliancebernstein vs. DWS Municipal Income |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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