Correlation Between Hercules Capital and AllianceBernstein

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

By analyzing existing cross correlation between Hercules Capital and AllianceBernstein Holding LP, you can compare the effects of market volatilities on Hercules Capital 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 Hercules Capital with a short position of AllianceBernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hercules Capital and AllianceBernstein.

Diversification Opportunities for Hercules Capital and AllianceBernstein

0.57

Correlation Coefficient

Hercules Capital  AllianceBernstein

Very weak diversification

The 3 months correlation between Hercules and AllianceBernstein is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hercules Capital and AllianceBernstein Holding LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianceBernstein and Hercules Capital 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 Hercules Capital 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 has no effect on the direction of Hercules Capital i.e., Hercules Capital and AllianceBernstein go up and down completely randomly.

Pair Corralation between Hercules Capital and AllianceBernstein

Given the investment horizon of 90 days Hercules Capital is expected to generate 0.53 times more return on investment than AllianceBernstein. However, Hercules Capital is 1.9 times less risky than AllianceBernstein. It trades about 0.3 of its potential returns per unit of risk. AllianceBernstein Holding LP is currently generating about -0.08 per unit of risk. If you would invest  1,821  in Hercules Capital on February 1, 2024 and sell it today you would earn a total of  91.00  from holding Hercules Capital or generate 5.0% return on investment over 90 days.

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

Hercules Capital  vs.  AllianceBernstein Holding LP

Hercules Capital

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hercules Capital are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Hercules Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hercules Capital and AllianceBernstein

The main advantage of trading using opposite Hercules Capital and AllianceBernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hercules Capital 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 Hercules Capital and AllianceBernstein Holding LP 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.