Correlation Between Altisource Asset and Alliancebernstein

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Can any of the company-specific risk be diversified away by investing in both Altisource Asset 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 Altisource Asset and Alliancebernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altisource Asset Management and Alliancebernstein Holding LP, you can compare the effects of market volatilities on Altisource Asset 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 Altisource Asset with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altisource Asset and Alliancebernstein.

Diversification Opportunities for Altisource Asset and Alliancebernstein

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Altisource and Alliancebernstein is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Altisource Asset Management and Alliancebernstein Holding LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Altisource Asset 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 Altisource Asset Management 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 Altisource Asset i.e., Altisource Asset and Alliancebernstein go up and down completely randomly.

Pair Corralation between Altisource Asset and Alliancebernstein

Given the investment horizon of 90 days Altisource Asset Management is expected to generate 6.36 times more return on investment than Alliancebernstein. However, Altisource Asset is 6.36 times more volatile than Alliancebernstein Holding LP. It trades about 0.36 of its potential returns per unit of risk. Alliancebernstein Holding LP is currently generating about 0.34 per unit of risk. If you would invest  1,064  in Altisource Asset Management on May 15, 2022 and sell it today you would earn a total of  1,192  from holding Altisource Asset Management or generate 112.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Altisource Asset Management  vs.  Alliancebernstein Holding LP

 Performance (%) 
       Timeline  
Altisource Asset Man 
Altisource Performance
15 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Altisource Asset Management are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating primary indicators, Altisource Asset sustained solid returns over the last few months and may actually be approaching a breakup point.

Altisource Price Channel

Alliancebernstein 
Alliancebernstein Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Alliancebernstein Holding LP are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental drivers, Alliancebernstein sustained solid returns over the last few months and may actually be approaching a breakup point.

Alliancebernstein Price Channel

Altisource Asset and Alliancebernstein Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Altisource Asset and Alliancebernstein

The main advantage of trading using opposite Altisource Asset and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altisource Asset 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 Altisource Asset Management and Alliancebernstein Holding LP 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.

Alliancebernstein Holding LP

Pair trading matchups for Alliancebernstein

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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