Correlation Between AllianceBernstein and Radian
Can any of the company-specific risk be diversified away by investing in both AllianceBernstein and Radian 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 Radian 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 Radian Group, you can compare the effects of market volatilities on AllianceBernstein and Radian 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 Radian. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianceBernstein and Radian.
Diversification Opportunities for AllianceBernstein and Radian
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AllianceBernstein and Radian is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and Radian Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radian Group 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 Radian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radian Group has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and Radian go up and down completely randomly.
Pair Corralation between AllianceBernstein and Radian
Allowing for the 90-day total investment horizon AllianceBernstein Holding LP is expected to under-perform the Radian. But the stock apears to be less risky and, when comparing its historical volatility, AllianceBernstein Holding LP is 1.6 times less risky than Radian. The stock trades about -0.11 of its potential returns per unit of risk. The Radian Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,411 in Radian Group on August 27, 2024 and sell it today you would earn a total of 136.00 from holding Radian Group or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AllianceBernstein Holding LP vs. Radian Group
Performance |
| Timeline |
| AllianceBernstein |
| Radian Group |
AllianceBernstein and Radian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AllianceBernstein and Radian
The main advantage of trading using opposite AllianceBernstein and Radian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AllianceBernstein position performs unexpectedly, Radian 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 Radian will offset losses from the drop in Radian's long position.| AllianceBernstein vs. Brightsphere Investment Group | AllianceBernstein vs. Affiliated Managers Group | AllianceBernstein vs. Bain Capital Specialty | AllianceBernstein vs. BlackRock Capital Allocation |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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