Correlation Between Alliancebernstein and Invesco Amt

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

By analyzing existing cross correlation between Alliancebernstein Global High and Invesco Amt Free Municipal, you can compare the effects of market volatilities on Alliancebernstein and Invesco Amt 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 Invesco Amt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Invesco Amt.

Diversification Opportunities for Alliancebernstein and Invesco Amt

0.69

Correlation Coefficient

Alliancebernstein  Invesco Amt

Poor diversification

The 3 months correlation between Alliancebernstein and Invesco is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Invesco Amt Free Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Amt Free 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 Global High are associated (or correlated) with Invesco Amt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Amt Free has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Invesco Amt go up and down completely randomly.

Pair Corralation between Alliancebernstein and Invesco Amt

Considering the 90-day investment horizon Alliancebernstein Global High is expected to under-perform the Invesco Amt. In addition to that, Alliancebernstein is 1.26 times more volatile than Invesco Amt Free Municipal. It trades about -0.13 of its total potential returns per unit of risk. Invesco Amt Free Municipal is currently generating about -0.07 per unit of volatility. If you would invest  694.00  in Invesco Amt Free Municipal on September 22, 2024 and sell it today you would lose (11.00) from holding Invesco Amt Free Municipal or give up 1.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Alliancebernstein Global High  vs.  Invesco Amt Free Municipal

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein Global High has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Invesco Amt Free

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Amt Free Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Invesco Amt 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 Invesco Amt

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

The idea behind Alliancebernstein Global High and Invesco Amt Free 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.