Correlation Between AllianceBernstein and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both AllianceBernstein and Gladstone Investment 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 Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AllianceBernstein Holding LP and Gladstone Investment, you can compare the effects of market volatilities on AllianceBernstein and Gladstone Investment 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 Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianceBernstein and Gladstone Investment.
Diversification Opportunities for AllianceBernstein and Gladstone Investment
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AllianceBernstein and Gladstone is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment 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 Holding LP are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and Gladstone Investment go up and down completely randomly.
Pair Corralation between AllianceBernstein and Gladstone Investment
Allowing for the 90-day total investment horizon AllianceBernstein is expected to generate 2.29 times less return on investment than Gladstone Investment. In addition to that, AllianceBernstein is 1.26 times more volatile than Gladstone Investment. It trades about 0.02 of its total potential returns per unit of risk. Gladstone Investment is currently generating about 0.05 per unit of volatility. If you would invest 1,006 in Gladstone Investment on August 24, 2024 and sell it today you would earn a total of 344.00 from holding Gladstone Investment or generate 34.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AllianceBernstein Holding LP vs. Gladstone Investment
Performance |
| Timeline |
| AllianceBernstein |
| Gladstone Investment |
AllianceBernstein and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AllianceBernstein and Gladstone Investment
The main advantage of trading using opposite AllianceBernstein and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AllianceBernstein position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.| AllianceBernstein vs. Brightsphere Investment Group | AllianceBernstein vs. Affiliated Managers Group | AllianceBernstein vs. Bain Capital Specialty | AllianceBernstein vs. BlackRock Capital Allocation |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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