Correlation Between Alliancebernstein and Great West

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

Diversification Opportunities for Alliancebernstein and Great West

-0.07

Correlation Coefficient

Alliancebernstein  Great West

Good diversification

The 3 months correlation between Alliancebernstein and Great is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Great West Putnam High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Putnam 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Putnam has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Great West go up and down completely randomly.

Pair Corralation between Alliancebernstein and Great West

Considering the 90-day investment horizon Alliancebernstein is expected to generate 22.86 times less return on investment than Great West. In addition to that, Alliancebernstein is 2.21 times more volatile than Great West Putnam High. It trades about 0.01 of its total potential returns per unit of risk. Great West Putnam High is currently generating about 0.28 per unit of volatility. If you would invest  1,013  in Great West Putnam High on September 13, 2024 and sell it today you would earn a total of  33.00  from holding Great West Putnam High or generate 3.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Alliancebernstein Global High  vs.  Great West Putnam High

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.

Great West Putnam

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Putnam High are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Great West 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 Great West

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

The idea behind Alliancebernstein Global High and Great West Putnam High 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.