Correlation Between Alliancebernstein and Thrivent Limited

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

Diversification Opportunities for Alliancebernstein and Thrivent Limited

0.61

Correlation Coefficient

Alliancebernstein  Thrivent Limited

Poor diversification

The 3 months correlation between Alliancebernstein and Thrivent is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein Global High and Thrivent Limited Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Limited Maturity 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 Thrivent Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Limited Maturity has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Thrivent Limited go up and down completely randomly.

Pair Corralation between Alliancebernstein and Thrivent Limited

Considering the 90-day investment horizon Alliancebernstein is expected to generate 1.49 times less return on investment than Thrivent Limited. In addition to that, Alliancebernstein is 3.76 times more volatile than Thrivent Limited Maturity. It trades about 0.01 of its total potential returns per unit of risk. Thrivent Limited Maturity is currently generating about 0.07 per unit of volatility. If you would invest  1,235  in Thrivent Limited Maturity on September 3, 2024 and sell it today you would earn a total of  6.00  from holding Thrivent Limited Maturity or generate 0.49% 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.  Thrivent Limited Maturity

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.

Thrivent Limited Maturity

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Limited Maturity are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Thrivent Limited 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 Thrivent Limited

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

The idea behind Alliancebernstein Global High and Thrivent Limited Maturity 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 Global Correlations module to find global opportunities by holding instruments from different markets.