Correlation Between Alliancebernstein and BlackRock Capital

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

By analyzing existing cross correlation between Alliancebernstein National Municipal and BlackRock Capital Allocation, you can compare the effects of market volatilities on Alliancebernstein and BlackRock Capital 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 BlackRock Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and BlackRock Capital.

Diversification Opportunities for Alliancebernstein and BlackRock Capital

0.12

Correlation Coefficient

Alliancebernstein  BlackRock Capital

Average diversification

The 3 months correlation between Alliancebernstein and BlackRock is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and BlackRock Capital Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Capital 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 National Municipal are associated (or correlated) with BlackRock Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Capital has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and BlackRock Capital go up and down completely randomly.

Pair Corralation between Alliancebernstein and BlackRock Capital

Considering the 90-day investment horizon Alliancebernstein is expected to generate 2.46 times less return on investment than BlackRock Capital. But when comparing it to its historical volatility, Alliancebernstein National Municipal is 1.27 times less risky than BlackRock Capital. It trades about 0.05 of its potential returns per unit of risk. BlackRock Capital Allocation is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,123  in BlackRock Capital Allocation on September 1, 2024 and sell it today you would earn a total of  508.00  from holding BlackRock Capital Allocation or generate 45.24% return on investment over 90 days.

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

Alliancebernstein National Mun  vs.  BlackRock Capital Allocation

Alliancebernstein

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alliancebernstein National Municipal are ranked lower than 3 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

BlackRock Capital

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Capital Allocation are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BlackRock Capital is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Alliancebernstein and BlackRock Capital

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

The idea behind Alliancebernstein National Municipal and BlackRock Capital Allocation 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.