Correlation Between BlackRock Energy and Alliancebernstein

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

By analyzing existing cross correlation between BlackRock Energy and and Alliancebernstein National Municipal, you can compare the effects of market volatilities on BlackRock Energy and Alliancebernstein 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 BlackRock Energy with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Energy and Alliancebernstein.

Diversification Opportunities for BlackRock Energy and Alliancebernstein

-0.36

Correlation Coefficient

BlackRock Energy  Alliancebernstein

Very good diversification

The 3 months correlation between BlackRock and Alliancebernstein is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Energy and and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and BlackRock Energy 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 BlackRock Energy and are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of BlackRock Energy i.e., BlackRock Energy and Alliancebernstein go up and down completely randomly.

Pair Corralation between BlackRock Energy and Alliancebernstein

Considering the 90-day investment horizon BlackRock Energy and is expected to generate 1.7 times more return on investment than Alliancebernstein. However, BlackRock Energy is 1.7 times more volatile than Alliancebernstein National Municipal. It trades about 0.05 of its potential returns per unit of risk. Alliancebernstein National Municipal is currently generating about 0.05 per unit of risk. If you would invest  1,064  in BlackRock Energy and on September 1, 2024 and sell it today you would earn a total of  303.00  from holding BlackRock Energy and or generate 28.48% return on investment over 90 days.

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

BlackRock Energy and  vs.  Alliancebernstein National Mun

BlackRock Energy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Energy and are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish technical and fundamental indicators, BlackRock Energy may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Alliancebernstein

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alliancebernstein National Municipal are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong technical and fundamental indicators, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BlackRock Energy and Alliancebernstein

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

The idea behind BlackRock Energy and and Alliancebernstein National 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.