Correlation Between Affiliated Managers and AllianceBernstein
Can any of the company-specific risk be diversified away by investing in both Affiliated Managers and AllianceBernstein 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 Affiliated Managers and AllianceBernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Managers Group and AllianceBernstein Holding LP, you can compare the effects of market volatilities on Affiliated Managers and AllianceBernstein 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 Affiliated Managers with a short position of AllianceBernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and AllianceBernstein.
Diversification Opportunities for Affiliated Managers and AllianceBernstein
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Affiliated and AllianceBernstein is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group and AllianceBernstein Holding LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianceBernstein and Affiliated Managers 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 Affiliated Managers Group are associated (or correlated) with AllianceBernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AllianceBernstein has no effect on the direction of Affiliated Managers i.e., Affiliated Managers and AllianceBernstein go up and down completely randomly.
Pair Corralation between Affiliated Managers and AllianceBernstein
Considering the 90-day investment horizon Affiliated Managers Group is expected to generate 1.37 times more return on investment than AllianceBernstein. However, Affiliated Managers is 1.37 times more volatile than AllianceBernstein Holding LP. It trades about 0.08 of its potential returns per unit of risk. AllianceBernstein Holding LP is currently generating about 0.09 per unit of risk. If you would invest 15,992 in Affiliated Managers Group on August 24, 2024 and sell it today you would earn a total of 2,667 from holding Affiliated Managers Group or generate 16.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affiliated Managers Group vs. AllianceBernstein Holding LP
Performance |
| Timeline |
| Affiliated Managers |
| AllianceBernstein |
Affiliated Managers and AllianceBernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affiliated Managers and AllianceBernstein
The main advantage of trading using opposite Affiliated Managers and AllianceBernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Managers position performs unexpectedly, AllianceBernstein 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 AllianceBernstein will offset losses from the drop in AllianceBernstein's long position.| Affiliated Managers vs. Brightsphere Investment Group | Affiliated Managers vs. Franklin Templeton Limited | Affiliated Managers vs. Blackrock Muni Intermediate | Affiliated Managers vs. Munivest Fund |
| AllianceBernstein vs. Brightsphere Investment Group | AllianceBernstein vs. Affiliated Managers Group | AllianceBernstein vs. Bain Capital Specialty | AllianceBernstein vs. BlackRock Capital Allocation |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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