Correlation Between Infrastructure Fund and Alliancebernstein

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

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

Diversification Opportunities for Infrastructure Fund and Alliancebernstein

0.44

Correlation Coefficient

Infrastructure Fund  Alliancebernstein

Very weak diversification

The 3 months correlation between Infrastructure and Alliancebernstein is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Infrastructure Fund Institutio and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Infrastructure Fund 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 Infrastructure Fund Institutional 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 Infrastructure Fund i.e., Infrastructure Fund and Alliancebernstein go up and down completely randomly.

Pair Corralation between Infrastructure Fund and Alliancebernstein

Assuming the 90 days horizon Infrastructure Fund Institutional is expected to generate 0.45 times more return on investment than Alliancebernstein. However, Infrastructure Fund Institutional is 2.24 times less risky than Alliancebernstein. It trades about 0.03 of its potential returns per unit of risk. Alliancebernstein National Municipal is currently generating about -0.01 per unit of risk. If you would invest  2,395  in Infrastructure Fund Institutional on September 13, 2024 and sell it today you would earn a total of  12.00  from holding Infrastructure Fund Institutional or generate 0.5% return on investment over 90 days.

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

Infrastructure Fund Institutio  vs.  Alliancebernstein National Mun

Infrastructure Fund

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Infrastructure Fund Institutional are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Infrastructure Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein National Municipal has generated negative risk-adjusted returns adding no value to fund investors. 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 Infrastructure Fund and Alliancebernstein

The main advantage of trading using opposite Infrastructure Fund and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infrastructure Fund 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 Infrastructure Fund Institutional 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.