Correlation Between Alliancebernstein and Icon Information
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Icon Information 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 Icon Information 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 Icon Information Technology, you can compare the effects of market volatilities on Alliancebernstein and Icon Information 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 Icon Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Icon Information.
Diversification Opportunities for Alliancebernstein and Icon Information
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alliancebernstein and Icon is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Icon Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Information Tec 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 Icon Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Information Tec has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Icon Information go up and down completely randomly.
Pair Corralation between Alliancebernstein and Icon Information
Considering the 90-day investment horizon Alliancebernstein Global High is expected to under-perform the Icon Information. But the fund apears to be less risky and, when comparing its historical volatility, Alliancebernstein Global High is 2.08 times less risky than Icon Information. The fund trades about -0.35 of its potential returns per unit of risk. The Icon Information Technology is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,640 in Icon Information Technology on October 1, 2024 and sell it today you would lose (33.00) from holding Icon Information Technology or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliancebernstein Global High vs. Icon Information Technology
Performance |
| Timeline |
| Alliancebernstein |
| Icon Information Tec |
Alliancebernstein and Icon Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Icon Information
The main advantage of trading using opposite Alliancebernstein and Icon Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Icon Information 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 Icon Information will offset losses from the drop in Icon Information's long position.| Alliancebernstein vs. Western Asset Global | Alliancebernstein vs. European Equity Closed | Alliancebernstein vs. Western Asset High | Alliancebernstein vs. Blackrock Debt Strategies |
| Icon Information vs. Oppenheimer Gold Special | Icon Information vs. Fidelity Advisor Gold | Icon Information vs. James Balanced Golden | Icon Information vs. Vy Goldman Sachs |
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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