Correlation Between AllianceBernstein and Global Lights
Can any of the company-specific risk be diversified away by investing in both AllianceBernstein and Global Lights 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 Global Lights 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 Global Lights Acquisition, you can compare the effects of market volatilities on AllianceBernstein and Global Lights 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 Global Lights. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianceBernstein and Global Lights.
Diversification Opportunities for AllianceBernstein and Global Lights
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AllianceBernstein and Global is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and Global Lights Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Lights Acquisition 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 Global Lights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Lights Acquisition has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and Global Lights go up and down completely randomly.
Pair Corralation between AllianceBernstein and Global Lights
Allowing for the 90-day total investment horizon AllianceBernstein Holding LP is expected to generate 12.97 times more return on investment than Global Lights. However, AllianceBernstein is 12.97 times more volatile than Global Lights Acquisition. It trades about 0.04 of its potential returns per unit of risk. Global Lights Acquisition is currently generating about 0.23 per unit of risk. If you would invest 3,579 in AllianceBernstein Holding LP on September 14, 2024 and sell it today you would earn a total of 40.00 from holding AllianceBernstein Holding LP or generate 1.12% 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. Global Lights Acquisition
Performance |
| Timeline |
| AllianceBernstein |
| Global Lights Acquisition |
AllianceBernstein and Global Lights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AllianceBernstein and Global Lights
The main advantage of trading using opposite AllianceBernstein and Global Lights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AllianceBernstein position performs unexpectedly, Global Lights 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 Global Lights will offset losses from the drop in Global Lights' long position.| AllianceBernstein vs. Brightsphere Investment Group | AllianceBernstein vs. Affiliated Managers Group | AllianceBernstein vs. Bain Capital Specialty | AllianceBernstein vs. BlackRock Capital Allocation |
| Global Lights vs. Visa Class A | Global Lights vs. Diamond Hill Investment | Global Lights vs. Distoken Acquisition | Global Lights vs. AllianceBernstein Holding LP |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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