Correlation Between Alliancebernstein and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Old Westbury 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 Old Westbury 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 Old Westbury Municipal, you can compare the effects of market volatilities on Alliancebernstein and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Old Westbury.
Diversification Opportunities for Alliancebernstein and Old Westbury
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alliancebernstein and Old is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Municipal has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Old Westbury go up and down completely randomly.
Pair Corralation between Alliancebernstein and Old Westbury
Considering the 90-day investment horizon Alliancebernstein National Municipal is expected to generate 3.5 times more return on investment than Old Westbury. However, Alliancebernstein is 3.5 times more volatile than Old Westbury Municipal. It trades about 0.18 of its potential returns per unit of risk. Old Westbury Municipal is currently generating about 0.24 per unit of risk. If you would invest 1,118 in Alliancebernstein National Municipal on September 2, 2024 and sell it today you would earn a total of 31.00 from holding Alliancebernstein National Municipal or generate 2.77% 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. Old Westbury Municipal
Performance |
| Timeline |
| Alliancebernstein |
| Old Westbury Municipal |
Alliancebernstein and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Old Westbury
The main advantage of trading using opposite Alliancebernstein and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Alliancebernstein vs. Eaton Vance Short | Alliancebernstein vs. Allianzgi Diversified Income | Alliancebernstein vs. Ares Dynamic Credit | Alliancebernstein vs. DWS Municipal Income |
| Old Westbury vs. Old Westbury All | Old Westbury vs. Old Westbury California | Old Westbury vs. Old Westbury Credit | Old Westbury vs. Old Westbury Fixed |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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