Correlation Between Tekla Healthcare and Alliancebernstein

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

By analyzing existing cross correlation between Tekla Healthcare Investors and Alliancebernstein Multi Asset Inflation, you can compare the effects of market volatilities on Tekla Healthcare 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 Tekla Healthcare with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Alliancebernstein.

Diversification Opportunities for Tekla Healthcare and Alliancebernstein

-0.04

Correlation Coefficient

Tekla Healthcare  Alliancebernstein

Good diversification

The 3 months correlation between Tekla and Alliancebernstein is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Alliancebernstein Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein Multi and Tekla Healthcare 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 Tekla Healthcare Investors 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 Multi has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Alliancebernstein go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Alliancebernstein

If you would invest  910.00  in Alliancebernstein Multi Asset Inflation on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Alliancebernstein Multi Asset Inflation or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Tekla Healthcare Investors  vs.  Alliancebernstein Multi Asset

Tekla Healthcare Inv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tekla Healthcare Investors has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Tekla Healthcare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alliancebernstein Multi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein Multi Asset Inflation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tekla Healthcare and Alliancebernstein

The main advantage of trading using opposite Tekla Healthcare and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare 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.

The idea behind Tekla Healthcare Investors and Alliancebernstein Multi Asset Inflation 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.