Correlation Between Alliancebernstein and First Trust
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and First Trust 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 First Trust 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 First Trust Merger, you can compare the effects of market volatilities on Alliancebernstein and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and First Trust.
Diversification Opportunities for Alliancebernstein and First Trust
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alliancebernstein and First is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global Higho and First Trust Merger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Merger 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Merger has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and First Trust go up and down completely randomly.
Pair Corralation between Alliancebernstein and First Trust
Assuming the 90 days horizon Alliancebernstein Global Highome is expected to generate 0.93 times more return on investment than First Trust. However, Alliancebernstein Global Highome is 1.08 times less risky than First Trust. It trades about 0.04 of its potential returns per unit of risk. First Trust Merger is currently generating about 0.01 per unit of risk. If you would invest 1,112 in Alliancebernstein Global Highome on October 24, 2024 and sell it today you would earn a total of 24.00 from holding Alliancebernstein Global Highome or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Alliancebernstein Global Higho vs. First Trust Merger
Performance |
| Timeline |
| Alliancebernstein |
| First Trust Merger |
Alliancebernstein and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and First Trust
The main advantage of trading using opposite Alliancebernstein and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Alliancebernstein vs. Saat Defensive Strategy | Alliancebernstein vs. Western Assets Emerging | Alliancebernstein vs. Siit Emerging Markets | Alliancebernstein vs. Eagle Mlp Strategy |
| First Trust vs. Ms Global Fixed | First Trust vs. Alliancebernstein Global Highome | First Trust vs. Qs Global Equity | First Trust vs. Barings Global Floating |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |