Correlation Between AllianceBernstein and Aon PLC

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

By analyzing existing cross correlation between AllianceBernstein Holding LP and Aon PLC, you can compare the effects of market volatilities on AllianceBernstein and Aon PLC 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 Aon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianceBernstein and Aon PLC.

Diversification Opportunities for AllianceBernstein and Aon PLC

-0.03

Correlation Coefficient

AllianceBernstein  Aon PLC

Good diversification

The 3 months correlation between AllianceBernstein and Aon is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and Aon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aon PLC 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 Holding LP are associated (or correlated) with Aon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aon PLC has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and Aon PLC go up and down completely randomly.

Pair Corralation between AllianceBernstein and Aon PLC

Allowing for the 90-day total investment horizon AllianceBernstein is expected to generate 2.72 times less return on investment than Aon PLC. But when comparing it to its historical volatility, AllianceBernstein Holding LP is 1.19 times less risky than Aon PLC. It trades about 0.01 of its potential returns per unit of risk. Aon PLC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  35,897  in Aon PLC on May 7, 2025 and sell it today you would earn a total of  143.00  from holding Aon PLC or generate 0.4% return on investment over 90 days.

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

AllianceBernstein Holding LP  vs.  Aon PLC

AllianceBernstein

Risk-Adjusted Performance

Weakest

Over the last 90 days AllianceBernstein Holding LP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, AllianceBernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aon PLC

Risk-Adjusted Performance

Weakest

Over the last 90 days Aon PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Aon PLC is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with AllianceBernstein and Aon PLC

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

The idea behind AllianceBernstein Holding LP and Aon PLC 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.