Correlation Between Alliancebernstein and M Large
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and M Large 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 M Large 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 M Large Cap, you can compare the effects of market volatilities on Alliancebernstein and M Large 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 M Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and M Large.
Diversification Opportunities for Alliancebernstein and M Large
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alliancebernstein and MTCGX is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and M Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Large Cap 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 M Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Large Cap has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and M Large go up and down completely randomly.
Pair Corralation between Alliancebernstein and M Large
Considering the 90-day investment horizon Alliancebernstein is expected to generate 1.97 times less return on investment than M Large. But when comparing it to its historical volatility, Alliancebernstein National Municipal is 2.22 times less risky than M Large. It trades about 0.1 of its potential returns per unit of risk. M Large Cap is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,888 in M Large Cap on September 14, 2024 and sell it today you would earn a total of 869.00 from holding M Large Cap or generate 30.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Alliancebernstein National Mun vs. M Large Cap
Performance |
| Timeline |
| Alliancebernstein |
| M Large Cap |
Alliancebernstein and M Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and M Large
The main advantage of trading using opposite Alliancebernstein and M Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, M Large 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 M Large will offset losses from the drop in M Large's long position.| Alliancebernstein vs. Eaton Vance Short | Alliancebernstein vs. Allianzgi Diversified Income | Alliancebernstein vs. Ares Dynamic Credit | Alliancebernstein vs. DWS Municipal Income |
| M Large vs. Alliancebernstein National Municipal | M Large vs. Transamerica Intermediate Muni | M Large vs. Franklin High Yield | M Large vs. The National Tax Free |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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