Correlation Between Alliancebernstein and Western Asset
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Western Asset 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 Western Asset 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 Western Asset High, you can compare the effects of market volatilities on Alliancebernstein and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Western Asset.
Diversification Opportunities for Alliancebernstein and Western Asset
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alliancebernstein and Western is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Western Asset go up and down completely randomly.
Pair Corralation between Alliancebernstein and Western Asset
Considering the 90-day investment horizon Alliancebernstein Global High is expected to generate 0.93 times more return on investment than Western Asset. However, Alliancebernstein Global High is 1.08 times less risky than Western Asset. It trades about 0.14 of its potential returns per unit of risk. Western Asset High is currently generating about 0.11 per unit of risk. If you would invest 902.00 in Alliancebernstein Global High on September 14, 2024 and sell it today you would earn a total of 184.00 from holding Alliancebernstein Global High or generate 20.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliancebernstein Global High vs. Western Asset High
Performance |
| Timeline |
| Alliancebernstein |
| Western Asset High |
Alliancebernstein and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Western Asset
The main advantage of trading using opposite Alliancebernstein and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Alliancebernstein vs. Western Asset High | Alliancebernstein vs. Blackrock Debt Strategies | Alliancebernstein vs. Western Asset Diversified | Alliancebernstein vs. Western Asset Global |
| Western Asset vs. Western Asset Global | Western Asset vs. Western Asset High | Western Asset vs. Voya Global Advantage | Western Asset vs. Voya Global Equity |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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