Correlation Between ClimateRock and AllianceBernstein

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

By analyzing existing cross correlation between ClimateRock Class A and AllianceBernstein Holding LP, you can compare the effects of market volatilities on ClimateRock 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 ClimateRock with a short position of AllianceBernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClimateRock and AllianceBernstein.

Diversification Opportunities for ClimateRock and AllianceBernstein

0.68

Correlation Coefficient

ClimateRock  AllianceBernstein

Poor diversification

The 3 months correlation between ClimateRock and AllianceBernstein is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ClimateRock Class A and AllianceBernstein Holding LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianceBernstein and ClimateRock 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 ClimateRock Class A 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 ClimateRock i.e., ClimateRock and AllianceBernstein go up and down completely randomly.

Pair Corralation between ClimateRock and AllianceBernstein

Given the investment horizon of 90 days ClimateRock is expected to generate 10.39 times less return on investment than AllianceBernstein. But when comparing it to its historical volatility, ClimateRock Class A is 20.16 times less risky than AllianceBernstein. It trades about 0.2 of its potential returns per unit of risk. AllianceBernstein Holding LP is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,373  in AllianceBernstein Holding LP on August 30, 2024 and sell it today you would earn a total of  294.00  from holding AllianceBernstein Holding LP or generate 8.72% return on investment over 90 days.

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

ClimateRock Class A  vs.  AllianceBernstein Holding LP

ClimateRock Class

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ClimateRock Class A are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ClimateRock is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

AllianceBernstein

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AllianceBernstein Holding LP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, AllianceBernstein may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with ClimateRock and AllianceBernstein

The main advantage of trading using opposite ClimateRock and AllianceBernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ClimateRock 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 ClimateRock Class A and AllianceBernstein Holding LP 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.