Correlation Between Alliancebernstein and Aqr International
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Aqr International 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 Aqr International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliancebernstein Global Highome and Aqr International Defensive, you can compare the effects of market volatilities on Alliancebernstein and Aqr International 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 Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Aqr International.
Diversification Opportunities for Alliancebernstein and Aqr International
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alliancebernstein and Aqr is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global Higho and Aqr International Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International 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 Highome are associated (or correlated) with Aqr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr International has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Aqr International go up and down completely randomly.
Pair Corralation between Alliancebernstein and Aqr International
Assuming the 90 days horizon Alliancebernstein is expected to generate 2.62 times less return on investment than Aqr International. But when comparing it to its historical volatility, Alliancebernstein Global Highome is 2.1 times less risky than Aqr International. It trades about 0.06 of its potential returns per unit of risk. Aqr International Defensive is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,452 in Aqr International Defensive on October 20, 2024 and sell it today you would earn a total of 10.00 from holding Aqr International Defensive or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliancebernstein Global Higho vs. Aqr International Defensive
Performance |
| Timeline |
| Alliancebernstein |
| Aqr International |
Alliancebernstein and Aqr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Aqr International
The main advantage of trading using opposite Alliancebernstein and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Aqr International 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 Aqr International will offset losses from the drop in Aqr International's long position.| Alliancebernstein vs. Icon Financial Fund | Alliancebernstein vs. Putnam Global Financials | Alliancebernstein vs. Blackstone Secured Lending | Alliancebernstein vs. Goldman Sachs Financial |
| Aqr International vs. Asg Global Alternatives | Aqr International vs. Alliancebernstein Global Highome | Aqr International vs. Federated Global Allocation | Aqr International vs. Rbc Global Equity |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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