Correlation Between AllianceBernstein and Focus Impact

Can any of the company-specific risk be diversified away by investing in both AllianceBernstein and Focus Impact 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 Focus Impact 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 Focus Impact Acquisition, you can compare the effects of market volatilities on AllianceBernstein and Focus Impact 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 Focus Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianceBernstein and Focus Impact.

Diversification Opportunities for AllianceBernstein and Focus Impact

-0.49

Correlation Coefficient

AllianceBernstein  Focus Impact

Very good diversification

The 3 months correlation between AllianceBernstein and Focus is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and Focus Impact Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Impact Acquisition 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 Focus Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Impact Acquisition has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and Focus Impact go up and down completely randomly.

Pair Corralation between AllianceBernstein and Focus Impact

Allowing for the 90-day total investment horizon AllianceBernstein Holding LP is expected to generate 0.07 times more return on investment than Focus Impact. However, AllianceBernstein Holding LP is 15.3 times less risky than Focus Impact. It trades about 0.08 of its potential returns per unit of risk. Focus Impact Acquisition is currently generating about -0.05 per unit of risk. If you would invest  3,435  in AllianceBernstein Holding LP on August 21, 2024 and sell it today you would earn a total of  215.00  from holding AllianceBernstein Holding LP or generate 6.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	89.06%
Values	Daily Returns

AllianceBernstein Holding LP  vs.  Focus Impact Acquisition

AllianceBernstein

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AllianceBernstein Holding LP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental drivers, AllianceBernstein may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Focus Impact Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Focus Impact Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with AllianceBernstein and Focus Impact

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

The idea behind AllianceBernstein Holding LP and Focus Impact Acquisition 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.