Correlation Between Aberdeen Global and Alliancebernstein

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

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

Diversification Opportunities for Aberdeen Global and Alliancebernstein

0.19

Correlation Coefficient

Aberdeen Global  Alliancebernstein

Average diversification

The 3 months correlation between Aberdeen and Alliancebernstein is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Dynamic and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Aberdeen Global 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 Aberdeen Global Dynamic 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 Aberdeen Global i.e., Aberdeen Global and Alliancebernstein go up and down completely randomly.

Pair Corralation between Aberdeen Global and Alliancebernstein

Considering the 90-day investment horizon Aberdeen Global Dynamic is expected to generate 1.43 times more return on investment than Alliancebernstein. However, Aberdeen Global is 1.43 times more volatile than Alliancebernstein National Municipal. It trades about 0.06 of its potential returns per unit of risk. Alliancebernstein National Municipal is currently generating about 0.05 per unit of risk. If you would invest  788.00  in Aberdeen Global Dynamic on September 1, 2024 and sell it today you would earn a total of  237.00  from holding Aberdeen Global Dynamic or generate 30.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Aberdeen Global Dynamic  vs.  Alliancebernstein National Mun

Aberdeen Global Dynamic

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Global Dynamic are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Aberdeen Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with Aberdeen Global and Alliancebernstein

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

Check out your portfolio center.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.