Correlation Between Seafarer Overseas and Alliancebernstein
Can any of the company-specific risk be diversified away by investing in both Seafarer Overseas 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 Seafarer Overseas and Alliancebernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seafarer Overseas Growth and Alliancebernstein Global High, you can compare the effects of market volatilities on Seafarer Overseas 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 Seafarer Overseas with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seafarer Overseas and Alliancebernstein.
Diversification Opportunities for Seafarer Overseas and Alliancebernstein
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seafarer and Alliancebernstein is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Seafarer Overseas Growth and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Seafarer Overseas 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 Seafarer Overseas Growth 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 Seafarer Overseas i.e., Seafarer Overseas and Alliancebernstein go up and down completely randomly.
Pair Corralation between Seafarer Overseas and Alliancebernstein
Assuming the 90 days horizon Seafarer Overseas Growth is expected to under-perform the Alliancebernstein. In addition to that, Seafarer Overseas is 1.43 times more volatile than Alliancebernstein Global High. It trades about -0.1 of its total potential returns per unit of risk. Alliancebernstein Global High is currently generating about 0.2 per unit of volatility. If you would invest 1,079 in Alliancebernstein Global High on September 3, 2024 and sell it today you would earn a total of 22.00 from holding Alliancebernstein Global High or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seafarer Overseas Growth vs. Alliancebernstein Global High
Performance |
| Timeline |
| Seafarer Overseas Growth |
| Alliancebernstein |
Seafarer Overseas and Alliancebernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seafarer Overseas and Alliancebernstein
The main advantage of trading using opposite Seafarer Overseas and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seafarer Overseas 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.| Seafarer Overseas vs. Western Asset Inflation | Seafarer Overseas vs. Blackrock Inflation Protected | Seafarer Overseas vs. Ab Bond Inflation | Seafarer Overseas vs. Goldman Sachs Managed |
| Alliancebernstein vs. Doubleline Yield Opportunities | Alliancebernstein vs. Highland Floating Rate | Alliancebernstein vs. Doubleline Opportunistic Credit | Alliancebernstein vs. Western Asset Emerging |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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