Correlation Between Alliancebernstein and Kinetics Small

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

Diversification Opportunities for Alliancebernstein and Kinetics Small

-0.41

Correlation Coefficient

Alliancebernstein  Kinetics Small

Very good diversification

The 3 months correlation between Alliancebernstein and Kinetics is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Small Cap 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 Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Kinetics Small go up and down completely randomly.

Pair Corralation between Alliancebernstein and Kinetics Small

Considering the 90-day investment horizon Alliancebernstein Global High is expected to under-perform the Kinetics Small. But the fund apears to be less risky and, when comparing its historical volatility, Alliancebernstein Global High is 6.05 times less risky than Kinetics Small. The fund trades about -0.04 of its potential returns per unit of risk. The Kinetics Small Cap is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  15,281  in Kinetics Small Cap on September 17, 2024 and sell it today you would earn a total of  3,725  from holding Kinetics Small Cap or generate 24.38% return on investment over 90 days.

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

Alliancebernstein Global High  vs.  Kinetics Small Cap

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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Kinetics Small Cap

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Small Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Kinetics Small showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alliancebernstein and Kinetics Small

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

The idea behind Alliancebernstein Global High and Kinetics Small Cap 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.