Correlation Between Alliancebernstein and Ishares Municipal
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Ishares Municipal 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 Ishares Municipal 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 Ishares Municipal Bond, you can compare the effects of market volatilities on Alliancebernstein and Ishares Municipal 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 Ishares Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Ishares Municipal.
Diversification Opportunities for Alliancebernstein and Ishares Municipal
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alliancebernstein and Ishares is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Ishares Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Municipal Bond 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 Ishares Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Municipal Bond has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Ishares Municipal go up and down completely randomly.
Pair Corralation between Alliancebernstein and Ishares Municipal
Considering the 90-day investment horizon Alliancebernstein is expected to generate 3.15 times less return on investment than Ishares Municipal. In addition to that, Alliancebernstein is 2.36 times more volatile than Ishares Municipal Bond. It trades about 0.01 of its total potential returns per unit of risk. Ishares Municipal Bond is currently generating about 0.11 per unit of volatility. If you would invest 1,100 in Ishares Municipal Bond on August 26, 2024 and sell it today you would earn a total of 8.00 from holding Ishares Municipal Bond or generate 0.73% 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. Ishares Municipal Bond
Performance |
| Timeline |
| Alliancebernstein |
| Ishares Municipal Bond |
Alliancebernstein and Ishares Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Ishares Municipal
The main advantage of trading using opposite Alliancebernstein and Ishares Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Ishares Municipal 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 Ishares Municipal will offset losses from the drop in Ishares Municipal's long position.| Alliancebernstein vs. Eaton Vance Short | Alliancebernstein vs. Allianzgi Diversified Income | Alliancebernstein vs. Ares Dynamic Credit | Alliancebernstein vs. DWS Municipal Income |
| Ishares Municipal vs. Franklin High Yield | Ishares Municipal vs. Transamerica Intermediate Muni | Ishares Municipal vs. Pace Municipal Fixed | Ishares Municipal vs. Nuveen All American Municipal |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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