Correlation Between Us Government and Alliancebernstein

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

By analyzing existing cross correlation between Us Government Securities and Alliancebernstein Global Highome, you can compare the effects of market volatilities on Us Government 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 Us Government with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Alliancebernstein.

Diversification Opportunities for Us Government and Alliancebernstein

0.76

Correlation Coefficient

Us Government  Alliancebernstein

Poor diversification

The 3 months correlation between UGSDX and Alliancebernstein is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities and Alliancebernstein Global Higho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Us Government 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 Us Government Securities 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 Us Government i.e., Us Government and Alliancebernstein go up and down completely randomly.

Pair Corralation between Us Government and Alliancebernstein

Assuming the 90 days horizon Us Government is expected to generate 2.15 times less return on investment than Alliancebernstein. But when comparing it to its historical volatility, Us Government Securities is 1.85 times less risky than Alliancebernstein. It trades about 0.18 of its potential returns per unit of risk. Alliancebernstein Global Highome is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,118  in Alliancebernstein Global Highome on May 22, 2025 and sell it today you would earn a total of  25.00  from holding Alliancebernstein Global Highome or generate 2.24% return on investment over 90 days.

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

Us Government Securities  vs.  Alliancebernstein Global Higho

Us Government Securities

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Us Government Securities are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Us Government 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

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alliancebernstein Global Highome are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Us Government and Alliancebernstein

The main advantage of trading using opposite Us Government and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government 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 Us Government Securities and Alliancebernstein Global Highome 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.