Correlation Between Alliancebernstein and Federated Max
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Federated Max 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 Federated Max into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliancebernstein Global High and Federated Max Cap Index, you can compare the effects of market volatilities on Alliancebernstein and Federated Max 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 Federated Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Federated Max.
Diversification Opportunities for Alliancebernstein and Federated Max
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alliancebernstein and Federated is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Federated Max Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Max 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 Global High are associated (or correlated) with Federated Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Max Cap has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Federated Max go up and down completely randomly.
Pair Corralation between Alliancebernstein and Federated Max
Considering the 90-day investment horizon Alliancebernstein is expected to generate 2.22 times less return on investment than Federated Max. But when comparing it to its historical volatility, Alliancebernstein Global High is 1.83 times less risky than Federated Max. It trades about 0.11 of its potential returns per unit of risk. Federated Max Cap Index is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 751.00 in Federated Max Cap Index on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Federated Max Cap Index or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Alliancebernstein Global High vs. Federated Max Cap Index
Performance |
| Timeline |
| Alliancebernstein |
| Federated Max Cap |
Alliancebernstein and Federated Max Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Federated Max
The main advantage of trading using opposite Alliancebernstein and Federated Max positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Federated Max 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 Federated Max will offset losses from the drop in Federated Max's long position.| Alliancebernstein vs. Doubleline Yield Opportunities | Alliancebernstein vs. Highland Floating Rate | Alliancebernstein vs. Doubleline Opportunistic Credit | Alliancebernstein vs. Western Asset Emerging |
| Federated Max vs. Alliancebernstein Global High | Federated Max vs. Artisan High Income | Federated Max vs. Pace High Yield | Federated Max vs. Lgm Risk Managed |
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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