Correlation Between AllianceBernstein and Nexpoint Real

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

By analyzing existing cross correlation between AllianceBernstein Holding LP and Nexpoint Real Estate, you can compare the effects of market volatilities on AllianceBernstein and Nexpoint Real 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 Nexpoint Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianceBernstein and Nexpoint Real.

Diversification Opportunities for AllianceBernstein and Nexpoint Real

-0.02

Correlation Coefficient

AllianceBernstein  Nexpoint Real

Good diversification

The 3 months correlation between AllianceBernstein and Nexpoint is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and Nexpoint Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexpoint Real Estate 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 Holding LP are associated (or correlated) with Nexpoint Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexpoint Real Estate has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and Nexpoint Real go up and down completely randomly.

Pair Corralation between AllianceBernstein and Nexpoint Real

Allowing for the 90-day total investment horizon AllianceBernstein is expected to generate 1.73 times less return on investment than Nexpoint Real. But when comparing it to its historical volatility, AllianceBernstein Holding LP is 1.25 times less risky than Nexpoint Real. It trades about 0.05 of its potential returns per unit of risk. Nexpoint Real Estate is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,478  in Nexpoint Real Estate on September 21, 2024 and sell it today you would earn a total of  117.00  from holding Nexpoint Real Estate or generate 7.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

AllianceBernstein Holding LP  vs.  Nexpoint Real Estate

AllianceBernstein

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AllianceBernstein Holding LP are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, AllianceBernstein is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Nexpoint Real Estate

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nexpoint Real Estate are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Nexpoint Real may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with AllianceBernstein and Nexpoint Real

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

The idea behind AllianceBernstein Holding LP and Nexpoint Real Estate 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.