Correlation Between AllianceBernstein and TPG
Can any of the company-specific risk be diversified away by investing in both AllianceBernstein and TPG 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 TPG 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 TPG Inc, you can compare the effects of market volatilities on AllianceBernstein and TPG 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 TPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianceBernstein and TPG.
Diversification Opportunities for AllianceBernstein and TPG
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AllianceBernstein and TPG is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and TPG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG Inc 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 TPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Inc has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and TPG go up and down completely randomly.
Pair Corralation between AllianceBernstein and TPG
Allowing for the 90-day total investment horizon AllianceBernstein is expected to generate 6.74 times less return on investment than TPG. But when comparing it to its historical volatility, AllianceBernstein Holding LP is 1.33 times less risky than TPG. It trades about 0.02 of its potential returns per unit of risk. TPG Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,911 in TPG Inc on August 24, 2024 and sell it today you would earn a total of 4,059 from holding TPG Inc or generate 139.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AllianceBernstein Holding LP vs. TPG Inc
Performance |
| Timeline |
| AllianceBernstein |
| TPG Inc |
AllianceBernstein and TPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AllianceBernstein and TPG
The main advantage of trading using opposite AllianceBernstein and TPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AllianceBernstein position performs unexpectedly, TPG 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 TPG will offset losses from the drop in TPG's long position.| AllianceBernstein vs. Brightsphere Investment Group | AllianceBernstein vs. Affiliated Managers Group | AllianceBernstein vs. Bain Capital Specialty | AllianceBernstein vs. BlackRock Capital Allocation |
| TPG vs. Ares Management LP | TPG vs. Patria Investments | TPG vs. Apollo Global Management | TPG vs. Cion Investment Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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