Correlation Between Alliancebernstein and Oklahoma Municipal
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Oklahoma 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 Oklahoma 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 Oklahoma Municipal Fund, you can compare the effects of market volatilities on Alliancebernstein and Oklahoma 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 Oklahoma Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Oklahoma Municipal.
Diversification Opportunities for Alliancebernstein and Oklahoma Municipal
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alliancebernstein and Oklahoma is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Oklahoma Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma Municipal 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 Oklahoma Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oklahoma Municipal has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Oklahoma Municipal go up and down completely randomly.
Pair Corralation between Alliancebernstein and Oklahoma Municipal
Considering the 90-day investment horizon Alliancebernstein National Municipal is expected to generate 2.2 times more return on investment than Oklahoma Municipal. However, Alliancebernstein is 2.2 times more volatile than Oklahoma Municipal Fund. It trades about 0.12 of its potential returns per unit of risk. Oklahoma Municipal Fund is currently generating about 0.22 per unit of risk. If you would invest 1,127 in Alliancebernstein National Municipal on September 1, 2024 and sell it today you would earn a total of 22.00 from holding Alliancebernstein National Municipal or generate 1.95% 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. Oklahoma Municipal Fund
Performance |
| Timeline |
| Alliancebernstein |
| Oklahoma Municipal |
Alliancebernstein and Oklahoma Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Oklahoma Municipal
The main advantage of trading using opposite Alliancebernstein and Oklahoma Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Oklahoma 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 Oklahoma Municipal will offset losses from the drop in Oklahoma Municipal's long position.| Alliancebernstein vs. Eaton Vance Short | Alliancebernstein vs. Allianzgi Diversified Income | Alliancebernstein vs. Ares Dynamic Credit | Alliancebernstein vs. DWS Municipal Income |
| Oklahoma Municipal vs. Mesirow Financial Small | Oklahoma Municipal vs. Transamerica Financial Life | Oklahoma Municipal vs. 1919 Financial Services | Oklahoma Municipal vs. Angel Oak Financial |
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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