Correlation Between Bank of New York and Alliancebernstein

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

Diversification Opportunities for Bank of New York and Alliancebernstein

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Bank of New York and Alliancebernstein is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank Of New and Alliancebernstein Holding LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Bank of New York 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 Bank Of New 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 Bank of New York i.e., Bank of New York and Alliancebernstein go up and down completely randomly.

Pair Corralation between Bank of New York and Alliancebernstein

Allowing for the 90-day total investment horizon Bank Of New is expected to generate 1.16 times more return on investment than Alliancebernstein. However, Bank of New York is 1.16 times more volatile than Alliancebernstein Holding LP. It trades about 0.02 of its potential returns per unit of risk. Alliancebernstein Holding LP is currently generating about -0.4 per unit of risk. If you would invest  4,114  in Bank Of New on July 7, 2022 and sell it today you would earn a total of  23.00  from holding Bank Of New or generate 0.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Bank Of New  vs.  Alliancebernstein Holding LP

 Performance (%) 
       Timeline  
Bank of New York 
Bank of New York Performance
0 of 100
Over the last 90 days Bank Of New has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward-looking signals, Bank of New York is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Bank of New York Price Channel

Alliancebernstein 
Alliancebernstein Performance
0 of 100
Over the last 90 days Alliancebernstein Holding LP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Alliancebernstein Price Channel

Bank of New York and Alliancebernstein Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank of New York and Alliancebernstein

The main advantage of trading using opposite Bank of New York and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York 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.
Bank of New York vs. Boeing Company
The idea behind Bank Of New 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 vs. Boeing Company
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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