Correlation Between Alliancebernstein and Clearbridge International

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

Diversification Opportunities for Alliancebernstein and Clearbridge International

0.67

Correlation Coefficient

Alliancebernstein  Clearbridge International

Poor diversification

The 3 months correlation between Alliancebernstein and Clearbridge is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Clearbridge International Valu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge International 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 Clearbridge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge International has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Clearbridge International go up and down completely randomly.

Pair Corralation between Alliancebernstein and Clearbridge International

Considering the 90-day investment horizon Alliancebernstein Global High is expected to generate 0.46 times more return on investment than Clearbridge International. However, Alliancebernstein Global High is 2.17 times less risky than Clearbridge International. It trades about 0.01 of its potential returns per unit of risk. Clearbridge International Value is currently generating about -0.06 per unit of risk. If you would invest  1,088  in Alliancebernstein Global High on September 13, 2024 and sell it today you would earn a total of  1.00  from holding Alliancebernstein Global High or generate 0.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Alliancebernstein Global High  vs.  Clearbridge International Valu

Alliancebernstein

Risk-Adjusted Performance

0 of 100

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.

Clearbridge International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clearbridge International Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Clearbridge International 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 Clearbridge International

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

The idea behind Alliancebernstein Global High and Clearbridge International Value 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.