Correlation Between Alliancebernstein and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Technology, you can compare the effects of market volatilities on Alliancebernstein and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Goldman Sachs.
Diversification Opportunities for Alliancebernstein and Goldman Sachs
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alliancebernstein and Goldman is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Goldman Sachs Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Technology 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Technology has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Goldman Sachs go up and down completely randomly.
Pair Corralation between Alliancebernstein and Goldman Sachs
Considering the 90-day investment horizon Alliancebernstein Global High is expected to under-perform the Goldman Sachs. But the fund apears to be less risky and, when comparing its historical volatility, Alliancebernstein Global High is 4.24 times less risky than Goldman Sachs. The fund trades about -0.28 of its potential returns per unit of risk. The Goldman Sachs Technology is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,548 in Goldman Sachs Technology on September 23, 2024 and sell it today you would lose (49.00) from holding Goldman Sachs Technology or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliancebernstein Global High vs. Goldman Sachs Technology
Performance |
| Timeline |
| Alliancebernstein |
| Goldman Sachs Technology |
Alliancebernstein and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Goldman Sachs
The main advantage of trading using opposite Alliancebernstein and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Alliancebernstein vs. Doubleline Yield Opportunities | Alliancebernstein vs. Highland Floating Rate | Alliancebernstein vs. Doubleline Opportunistic Credit | Alliancebernstein vs. Western Asset Emerging |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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