Correlation Between Alliancebernstein and Hartford Growth

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

By analyzing existing cross correlation between Alliancebernstein National Municipal and The Hartford Growth, you can compare the effects of market volatilities on Alliancebernstein and Hartford Growth 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 Hartford Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Hartford Growth.

Diversification Opportunities for Alliancebernstein and Hartford Growth

0.66

Correlation Coefficient

Alliancebernstein  Hartford Growth

Poor diversification

The 3 months correlation between Alliancebernstein and Hartford is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth 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 National Municipal are associated (or correlated) with Hartford Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Hartford Growth go up and down completely randomly.

Pair Corralation between Alliancebernstein and Hartford Growth

Considering the 90-day investment horizon Alliancebernstein is expected to generate 1.28 times less return on investment than Hartford Growth. But when comparing it to its historical volatility, Alliancebernstein National Municipal is 2.49 times less risky than Hartford Growth. It trades about 0.42 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  6,010  in The Hartford Growth on February 23, 2024 and sell it today you would earn a total of  291.00  from holding The Hartford Growth or generate 4.84% return on investment over 90 days.

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

Alliancebernstein National Mun  vs.  The Hartford Growth

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein National Municipal has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat 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.

Hartford Growth

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Growth are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hartford Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alliancebernstein and Hartford Growth

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

The idea behind Alliancebernstein National Municipal and The Hartford Growth 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.