Correlation Between AllianceBernstein and Stifel Financial

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

Diversification Opportunities for AllianceBernstein and Stifel Financial

0.53

Correlation Coefficient

AllianceBernstein  Stifel Financial

Very weak diversification

The 3 months correlation between AllianceBernstein and Stifel is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and Stifel Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel Financial 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 Stifel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stifel Financial has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and Stifel Financial go up and down completely randomly.

Pair Corralation between AllianceBernstein and Stifel Financial

Allowing for the 90-day total investment horizon AllianceBernstein is expected to generate 2.06 times less return on investment than Stifel Financial. In addition to that, AllianceBernstein is 1.03 times more volatile than Stifel Financial. It trades about 0.04 of its total potential returns per unit of risk. Stifel Financial is currently generating about 0.09 per unit of volatility. If you would invest  6,497  in Stifel Financial on January 30, 2024 and sell it today you would earn a total of  1,408  from holding Stifel Financial or generate 21.67% return on investment over 90 days.

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

AllianceBernstein Holding LP  vs.  Stifel Financial

AllianceBernstein

Risk-Adjusted Performance

1 of 100

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.

Stifel Financial

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stifel Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Stifel Financial may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with AllianceBernstein and Stifel Financial

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

The idea behind AllianceBernstein Holding LP and Stifel Financial 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.