Correlation Between Alliancebernstein and Scharf Global

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

By analyzing existing cross correlation between Alliancebernstein Global High and Scharf Global Opportunity, you can compare the effects of market volatilities on Alliancebernstein and Scharf Global 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 Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Scharf Global.

Diversification Opportunities for Alliancebernstein and Scharf Global

0.66

Correlation Coefficient

Alliancebernstein  Scharf Global

Poor diversification

The 3 months correlation between Alliancebernstein and Scharf is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity 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 High are associated (or correlated) with Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Scharf Global go up and down completely randomly.

Pair Corralation between Alliancebernstein and Scharf Global

Considering the 90-day investment horizon Alliancebernstein Global High is expected to generate 1.06 times more return on investment than Scharf Global. However, Alliancebernstein is 1.06 times more volatile than Scharf Global Opportunity. It trades about 0.1 of its potential returns per unit of risk. Scharf Global Opportunity is currently generating about 0.0 per unit of risk. If you would invest  1,028  in Alliancebernstein Global High on March 4, 2024 and sell it today you would earn a total of  40.00  from holding Alliancebernstein Global High or generate 3.89% return on investment over 90 days.

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

Alliancebernstein Global High  vs.  Scharf Global Opportunity

Alliancebernstein

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alliancebernstein Global High are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Scharf Global Opportunity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scharf Global Opportunity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Scharf Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alliancebernstein and Scharf Global

The main advantage of trading using opposite Alliancebernstein and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Scharf Global 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 Scharf Global will offset losses from the drop in Scharf Global's long position.

The idea behind Alliancebernstein Global High and Scharf Global Opportunity 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.