Correlation Between Alliancebernstein and New Economy
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and New Economy 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 New Economy 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 New Economy Fund, you can compare the effects of market volatilities on Alliancebernstein and New Economy 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 New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and New Economy.
Diversification Opportunities for Alliancebernstein and New Economy
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alliancebernstein and New is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund 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 New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and New Economy go up and down completely randomly.
Pair Corralation between Alliancebernstein and New Economy
Considering the 90-day investment horizon Alliancebernstein is expected to generate 6.03 times less return on investment than New Economy. But when comparing it to its historical volatility, Alliancebernstein National Municipal is 1.36 times less risky than New Economy. It trades about 0.03 of its potential returns per unit of risk. New Economy Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,306 in New Economy Fund on August 31, 2024 and sell it today you would earn a total of 487.00 from holding New Economy Fund or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliancebernstein National Mun vs. New Economy Fund
Performance |
| Timeline |
| Alliancebernstein |
| New Economy Fund |
Alliancebernstein and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and New Economy
The main advantage of trading using opposite Alliancebernstein and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, New Economy 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 New Economy will offset losses from the drop in New Economy's long position.| Alliancebernstein vs. MFS Investment Grade | Alliancebernstein vs. Eaton Vance Municipal | Alliancebernstein vs. DTF Tax Free | Alliancebernstein vs. HUMANA INC |
| New Economy vs. Fidelity Series Government | New Economy vs. Us Government Securities | New Economy vs. Us Government Securities | New Economy vs. Dws Government Money |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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