Correlation Between Alliancebernstein and BlackRock Energy

Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and BlackRock Energy 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 Energy 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 Energy and, you can compare the effects of market volatilities on Alliancebernstein and BlackRock Energy 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 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and BlackRock Energy.

Diversification Opportunities for Alliancebernstein and BlackRock Energy

-0.36

Correlation Coefficient

Alliancebernstein  BlackRock Energy

Very good diversification

The 3 months correlation between Alliancebernstein and BlackRock is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and BlackRock Energy and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Energy 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 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Energy has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and BlackRock Energy go up and down completely randomly.

Pair Corralation between Alliancebernstein and BlackRock Energy

Considering the 90-day investment horizon Alliancebernstein is expected to generate 1.78 times less return on investment than BlackRock Energy. But when comparing it to its historical volatility, Alliancebernstein National Municipal is 1.7 times less risky than BlackRock Energy. It trades about 0.05 of its potential returns per unit of risk. BlackRock Energy and is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,064  in BlackRock Energy and on September 1, 2024 and sell it today you would earn a total of  303.00  from holding BlackRock Energy and or generate 28.48% return on investment over 90 days.

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

Alliancebernstein National Mun  vs.  BlackRock Energy and

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 Energy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Energy and are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish technical and fundamental indicators, BlackRock Energy may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Alliancebernstein and BlackRock Energy

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

The idea behind Alliancebernstein National Municipal and BlackRock Energy and 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.