Correlation Between Alger Health and Baron Select
Can any of the company-specific risk be diversified away by investing in both Alger Health and Baron Select 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 Alger Health and Baron Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Health Sciences and Baron Select Funds, you can compare the effects of market volatilities on Alger Health and Baron Select 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 Alger Health with a short position of Baron Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Baron Select.
Diversification Opportunities for Alger Health and Baron Select
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Alger and Baron is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Baron Select Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Select Funds and Alger Health 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 Alger Health Sciences are associated (or correlated) with Baron Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Select Funds has no effect on the direction of Alger Health i.e., Alger Health and Baron Select go up and down completely randomly.
Pair Corralation between Alger Health and Baron Select
Assuming the 90 days horizon Alger Health Sciences is expected to under-perform the Baron Select. But the mutual fund apears to be less risky and, when comparing its historical volatility, Alger Health Sciences is 1.37 times less risky than Baron Select. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Baron Select Funds is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,308 in Baron Select Funds on September 14, 2024 and sell it today you would earn a total of 63.00 from holding Baron Select Funds or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Health Sciences vs. Baron Select Funds
Performance |
| Timeline |
| Alger Health Sciences |
| Baron Select Funds |
Alger Health and Baron Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Baron Select
The main advantage of trading using opposite Alger Health and Baron Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Baron Select 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 Baron Select will offset losses from the drop in Baron Select's long position.| Alger Health vs. Quantitative Longshort Equity | Alger Health vs. Boston Partners Longshort | Alger Health vs. Rbc Short Duration | Alger Health vs. Kentucky Tax Free Short To Medium |
| Baron Select vs. Morningstar Municipal Bond | Baron Select vs. The National Tax Free | Baron Select vs. California High Yield Municipal | Baron Select vs. Dws Government Money |
Check out your portfolio center.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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