Correlation Between AllianceBernstein and Thunder Bridge

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

Diversification Opportunities for AllianceBernstein and Thunder Bridge

0.18

Correlation Coefficient

AllianceBernstein  Thunder Bridge

Average diversification

The 3 months correlation between AllianceBernstein and Thunder is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBernstein Holding LP and Thunder Bridge Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Bridge Capital 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 Thunder Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Bridge Capital has no effect on the direction of AllianceBernstein i.e., AllianceBernstein and Thunder Bridge go up and down completely randomly.

Pair Corralation between AllianceBernstein and Thunder Bridge

Allowing for the 90-day total investment horizon AllianceBernstein is expected to generate 613.12 times less return on investment than Thunder Bridge. But when comparing it to its historical volatility, AllianceBernstein Holding LP is 188.27 times less risky than Thunder Bridge. It trades about 0.09 of its potential returns per unit of risk. Thunder Bridge Capital is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  21.00  in Thunder Bridge Capital on October 7, 2024 and sell it today you would earn a total of  228.00  from holding Thunder Bridge Capital or generate 1085.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	42.06%
Values	Daily Returns

AllianceBernstein Holding LP  vs.  Thunder Bridge Capital

AllianceBernstein

Risk-Adjusted Performance

8 of 100

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 fragile fundamental drivers, AllianceBernstein may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Thunder Bridge Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thunder Bridge Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Thunder Bridge is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with AllianceBernstein and Thunder Bridge

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

The idea behind AllianceBernstein Holding LP and Thunder Bridge Capital 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.