Correlation Between AllianceBernstein and PayPal Holdings

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

Diversification Opportunities for AllianceBernstein and PayPal Holdings

0.6

Correlation Coefficient

AllianceBernstein  PayPal Holdings

Poor diversification

The 3 months correlation between AllianceBernstein and PayPal is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and PayPal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings 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 PayPal Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PayPal Holdings has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and PayPal Holdings go up and down completely randomly.

Pair Corralation between AllianceBernstein and PayPal Holdings

Allowing for the 90-day total investment horizon AllianceBernstein Holding LP is expected to generate 0.58 times more return on investment than PayPal Holdings. However, AllianceBernstein Holding LP is 1.73 times less risky than PayPal Holdings. It trades about 0.02 of its potential returns per unit of risk. PayPal Holdings is currently generating about 0.0 per unit of risk. If you would invest  4,017  in AllianceBernstein Holding LP on May 6, 2025 and sell it today you would earn a total of  45.00  from holding AllianceBernstein Holding LP or generate 1.12% return on investment over 90 days.

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

AllianceBernstein Holding LP  vs.  PayPal Holdings

AllianceBernstein

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AllianceBernstein Holding LP are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, AllianceBernstein is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

PayPal Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days PayPal Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, PayPal Holdings is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with AllianceBernstein and PayPal Holdings

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

The idea behind AllianceBernstein Holding LP and PayPal Holdings 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..