Correlation Between AllianceBernstein and BlackRock Health

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

Diversification Opportunities for AllianceBernstein and BlackRock Health

-0.58
  Correlation Coefficient

Excellent diversification

The 3 months correlation between AllianceBernstein and BlackRock is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and BlackRock Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Health Sciences 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 BlackRock Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Health Sciences has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and BlackRock Health go up and down completely randomly.

Pair Corralation between AllianceBernstein and BlackRock Health

Allowing for the 90-day total investment horizon AllianceBernstein Holding LP is expected to generate 1.91 times more return on investment than BlackRock Health. However, AllianceBernstein is 1.91 times more volatile than BlackRock Health Sciences. It trades about 0.11 of its potential returns per unit of risk. BlackRock Health Sciences is currently generating about -0.08 per unit of risk. If you would invest  3,289  in AllianceBernstein Holding LP on September 5, 2024 and sell it today you would earn a total of  311.00  from holding AllianceBernstein Holding LP or generate 9.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

AllianceBernstein Holding LP  vs.  BlackRock Health Sciences

 Performance 
       Timeline  
AllianceBernstein 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in AllianceBernstein Holding LP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental drivers, AllianceBernstein may actually be approaching a critical reversion point that can send shares even higher in January 2025.
BlackRock Health Sciences 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BlackRock Health Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, BlackRock Health is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

AllianceBernstein and BlackRock Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AllianceBernstein and BlackRock Health

The main advantage of trading using opposite AllianceBernstein and BlackRock Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AllianceBernstein position performs unexpectedly, BlackRock Health 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 BlackRock Health will offset losses from the drop in BlackRock Health's long position.
The idea behind AllianceBernstein Holding LP and BlackRock Health Sciences 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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