Correlation Between Alliancebernstein and Multimanager Lifestyle

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

By analyzing existing cross correlation between Alliancebernstein Bond and Multimanager Lifestyle Aggressive, you can compare the effects of market volatilities on Alliancebernstein and Multimanager Lifestyle 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 Multimanager Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Multimanager Lifestyle.

Diversification Opportunities for Alliancebernstein and Multimanager Lifestyle

0.0

Correlation Coefficient

Alliancebernstein  Multimanager Lifestyle

Pay attention - limited upside

The 3 months correlation between Alliancebernstein and Multimanager is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Bond and Multimanager Lifestyle Aggress in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle 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 Bond are associated (or correlated) with Multimanager Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimanager Lifestyle has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Multimanager Lifestyle go up and down completely randomly.

Pair Corralation between Alliancebernstein and Multimanager Lifestyle

If you would invest  1,488  in Multimanager Lifestyle Aggressive on September 15, 2024 and sell it today you would earn a total of  58.00  from holding Multimanager Lifestyle Aggressive or generate 3.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	89.06%
Values	Daily Returns

Alliancebernstein Bond  vs.  Multimanager Lifestyle Aggress

Alliancebernstein Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Multimanager Lifestyle

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Multimanager Lifestyle Aggressive are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Multimanager Lifestyle 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 Multimanager Lifestyle

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

The idea behind Alliancebernstein Bond and Multimanager Lifestyle Aggressive 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.