Correlation Between Alliancebernstein and American Mutual
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and American Mutual 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 American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliancebernstein National Municipal and American Mutual Fund, you can compare the effects of market volatilities on Alliancebernstein and American Mutual 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 American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and American Mutual.
Diversification Opportunities for Alliancebernstein and American Mutual
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alliancebernstein and American is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual 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 National Municipal are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and American Mutual go up and down completely randomly.
Pair Corralation between Alliancebernstein and American Mutual
Considering the 90-day investment horizon Alliancebernstein is expected to generate 3.12 times less return on investment than American Mutual. In addition to that, Alliancebernstein is 1.04 times more volatile than American Mutual Fund. It trades about 0.07 of its total potential returns per unit of risk. American Mutual Fund is currently generating about 0.24 per unit of volatility. If you would invest 5,471 in American Mutual Fund on October 20, 2024 and sell it today you would earn a total of 163.00 from holding American Mutual Fund or generate 2.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliancebernstein National Mun vs. American Mutual Fund
Performance |
| Timeline |
| Alliancebernstein |
| American Mutual |
Alliancebernstein and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and American Mutual
The main advantage of trading using opposite Alliancebernstein and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual's long position.| Alliancebernstein vs. Eaton Vance Short | Alliancebernstein vs. Allianzgi Diversified Income | Alliancebernstein vs. Ares Dynamic Credit | Alliancebernstein vs. DWS Municipal Income |
| American Mutual vs. Enhanced Large Pany | American Mutual vs. Touchstone Large Cap | American Mutual vs. Rational Strategic Allocation | American Mutual vs. Transamerica Asset 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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