Correlation Between Alliancebernstein and Kensington Active
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Kensington Active 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 Kensington Active 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 Kensington Active Advantage, you can compare the effects of market volatilities on Alliancebernstein and Kensington Active 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 Kensington Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Kensington Active.
Diversification Opportunities for Alliancebernstein and Kensington Active
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alliancebernstein and Kensington is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Kensington Active Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kensington Active 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 Kensington Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kensington Active has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Kensington Active go up and down completely randomly.
Pair Corralation between Alliancebernstein and Kensington Active
Considering the 90-day investment horizon Alliancebernstein Global High is expected to generate 1.33 times more return on investment than Kensington Active. However, Alliancebernstein is 1.33 times more volatile than Kensington Active Advantage. It trades about 0.11 of its potential returns per unit of risk. Kensington Active Advantage is currently generating about 0.09 per unit of risk. If you would invest 882.00 in Alliancebernstein Global High on September 12, 2024 and sell it today you would earn a total of 205.00 from holding Alliancebernstein Global High or generate 23.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliancebernstein Global High vs. Kensington Active Advantage
Performance |
| Timeline |
| Alliancebernstein |
| Kensington Active |
Alliancebernstein and Kensington Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Kensington Active
The main advantage of trading using opposite Alliancebernstein and Kensington Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Kensington Active 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 Kensington Active will offset losses from the drop in Kensington Active's long position.| Alliancebernstein vs. Cornerstone Strategic Value | Alliancebernstein vs. Oxford Lane Capital | Alliancebernstein vs. Orchid Island Capital | Alliancebernstein vs. Guggenheim Strategic Opportunities |
| Kensington Active vs. Commonwealth Global Fund | Kensington Active vs. Ab Global Bond | Kensington Active vs. Legg Mason Global | Kensington Active vs. Alliancebernstein Global High |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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