Correlation Between Elysee Development and Alliancebernstein

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

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

Diversification Opportunities for Elysee Development and Alliancebernstein

0.51

Correlation Coefficient

Elysee Development  Alliancebernstein

Very weak diversification

The 3 months correlation between Elysee and Alliancebernstein is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Elysee Development Corp and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Elysee Development 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 Elysee Development Corp 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 Elysee Development i.e., Elysee Development and Alliancebernstein go up and down completely randomly.

Pair Corralation between Elysee Development and Alliancebernstein

Assuming the 90 days horizon Elysee Development is expected to generate 1.03 times less return on investment than Alliancebernstein. In addition to that, Elysee Development is 7.71 times more volatile than Alliancebernstein National Municipal. It trades about 0.01 of its total potential returns per unit of risk. Alliancebernstein National Municipal is currently generating about 0.07 per unit of volatility. If you would invest  954.00  in Alliancebernstein National Municipal on July 5, 2024 and sell it today you would earn a total of  240.00  from holding Alliancebernstein National Municipal or generate 25.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	87.07%
Values	Daily Returns

Elysee Development Corp  vs.  Alliancebernstein National Mun

Elysee Development Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elysee Development Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Elysee Development reported solid returns over the last few months and may actually be approaching a breakup point.

Alliancebernstein

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alliancebernstein National Municipal are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat abnormal technical and fundamental indicators, Alliancebernstein may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Pair Trading with Elysee Development and Alliancebernstein

The main advantage of trading using opposite Elysee Development and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elysee Development 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 Elysee Development Corp 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.

Check out your portfolio center.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.