Correlation Between State Street and Alliancebernstein

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

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

Diversification Opportunities for State Street and Alliancebernstein

0.0

Correlation Coefficient

State Street  Alliancebernstein

Pay attention - limited upside

The 3 months correlation between State and Alliancebernstein is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding State Street Institutional and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and State Street 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 State Street 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 State Street i.e., State Street and Alliancebernstein go up and down completely randomly.

Pair Corralation between State Street and Alliancebernstein

If you would invest  100.00  in State Street Institutional on September 15, 2024 and sell it today you would earn a total of  0.00  from holding State Street Institutional or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.97%
Values	Daily Returns

State Street Institutional  vs.  Alliancebernstein National Mun

State Street Institu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days State Street Institutional has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, State Street 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 latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with State Street and Alliancebernstein

The main advantage of trading using opposite State Street and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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 State Street 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 Global Correlations module to find global opportunities by holding instruments from different markets.