Correlation Between New Economy and Alliancebernstein
Can any of the company-specific risk be diversified away by investing in both New Economy and Alliancebernstein 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 New Economy and Alliancebernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Economy Fund and Alliancebernstein Global Highome, you can compare the effects of market volatilities on New Economy and Alliancebernstein 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 New Economy with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Economy and Alliancebernstein.
Diversification Opportunities for New Economy and Alliancebernstein
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Alliancebernstein is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding New Economy Fund and Alliancebernstein Global Higho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and New Economy 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 New Economy Fund are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of New Economy i.e., New Economy and Alliancebernstein go up and down completely randomly.
Pair Corralation between New Economy and Alliancebernstein
Assuming the 90 days horizon New Economy Fund is expected to generate 3.99 times more return on investment than Alliancebernstein. However, New Economy is 3.99 times more volatile than Alliancebernstein Global Highome. It trades about 0.17 of its potential returns per unit of risk. Alliancebernstein Global Highome is currently generating about 0.09 per unit of risk. If you would invest 6,134 in New Economy Fund on October 24, 2024 and sell it today you would earn a total of 187.00 from holding New Economy Fund or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
New Economy Fund vs. Alliancebernstein Global Higho
Performance |
| Timeline |
| New Economy Fund |
| Alliancebernstein |
New Economy and Alliancebernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Economy and Alliancebernstein
The main advantage of trading using opposite New Economy and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Economy position performs unexpectedly, Alliancebernstein 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 Alliancebernstein will offset losses from the drop in Alliancebernstein's long position.| New Economy vs. Jp Morgan Smartretirement | New Economy vs. Moderate Balanced Allocation | New Economy vs. College Retirement Equities | New Economy vs. Columbia Moderate Growth |
| Alliancebernstein vs. Saat Defensive Strategy | Alliancebernstein vs. Western Assets Emerging | Alliancebernstein vs. Siit Emerging Markets | Alliancebernstein vs. Eagle Mlp Strategy |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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