Correlation Between Ab Bond and Alliancebernstein

Can any of the company-specific risk be diversified away by investing in both Ab Bond 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 Ab Bond and Alliancebernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Bond Inflation and Alliancebernstein National Municipal, you can compare the effects of market volatilities on Ab Bond 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 Ab Bond with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Alliancebernstein.

Diversification Opportunities for Ab Bond and Alliancebernstein

0.43

Correlation Coefficient

Ab Bond  Alliancebernstein

Very weak diversification

The 3 months correlation between ABNCX and Alliancebernstein is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Ab Bond 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 Ab Bond Inflation 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 Ab Bond i.e., Ab Bond and Alliancebernstein go up and down completely randomly.

Pair Corralation between Ab Bond and Alliancebernstein

Assuming the 90 days horizon Ab Bond is expected to generate 3.55 times less return on investment than Alliancebernstein. But when comparing it to its historical volatility, Ab Bond Inflation is 1.96 times less risky than Alliancebernstein. It trades about 0.28 of its potential returns per unit of risk. Alliancebernstein National Municipal is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest  1,046  in Alliancebernstein National Municipal on February 17, 2024 and sell it today you would earn a total of  46.00  from holding Alliancebernstein National Municipal or generate 4.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ab Bond Inflation  vs.  Alliancebernstein National Mun

Ab Bond Inflation

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Bond Inflation are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Ab Bond is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Alliancebernstein

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alliancebernstein National Municipal are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong technical and fundamental indicators, Alliancebernstein is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Bond and Alliancebernstein

The main advantage of trading using opposite Ab Bond and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond 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.

The idea behind Ab Bond Inflation and Alliancebernstein National Municipal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.