Correlation Between Oak Woods and AllianceBernstein
Can any of the company-specific risk be diversified away by investing in both Oak Woods 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 Oak Woods and AllianceBernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oak Woods Acquisition and AllianceBernstein Holding LP, you can compare the effects of market volatilities on Oak Woods 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 Oak Woods with a short position of AllianceBernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oak Woods and AllianceBernstein.
Diversification Opportunities for Oak Woods and AllianceBernstein
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oak and AllianceBernstein is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Oak Woods Acquisition and AllianceBernstein Holding LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianceBernstein and Oak Woods 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 Oak Woods Acquisition 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 Oak Woods i.e., Oak Woods and AllianceBernstein go up and down completely randomly.
Pair Corralation between Oak Woods and AllianceBernstein
Assuming the 90 days horizon Oak Woods is expected to generate 2.26 times less return on investment than AllianceBernstein. But when comparing it to its historical volatility, Oak Woods Acquisition is 1.98 times less risky than AllianceBernstein. It trades about 0.04 of its potential returns per unit of risk. AllianceBernstein Holding LP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,963 in AllianceBernstein Holding LP on September 2, 2024 and sell it today you would earn a total of 664.00 from holding AllianceBernstein Holding LP or generate 22.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oak Woods Acquisition vs. AllianceBernstein Holding LP
Performance |
| Timeline |
| Oak Woods Acquisition |
| AllianceBernstein |
Oak Woods and AllianceBernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oak Woods and AllianceBernstein
The main advantage of trading using opposite Oak Woods and AllianceBernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Woods 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.| Oak Woods vs. Timken Company | Oak Woods vs. Estee Lauder Companies | Oak Woods vs. Eastern Co | Oak Woods vs. Valneva SE ADR |
| AllianceBernstein vs. Brightsphere Investment Group | AllianceBernstein vs. Affiliated Managers Group | AllianceBernstein vs. Bain Capital Specialty | AllianceBernstein vs. BlackRock Capital Allocation |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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