Correlation Between Alger Health and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Alger Health and Cohen Steers 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 Cohen Steers 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 Cohen Steers Prfrd, you can compare the effects of market volatilities on Alger Health and Cohen Steers 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 Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Cohen Steers.
Diversification Opportunities for Alger Health and Cohen Steers
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alger and Cohen is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Cohen Steers Prfrd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Prfrd 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 Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers Prfrd has no effect on the direction of Alger Health i.e., Alger Health and Cohen Steers go up and down completely randomly.
Pair Corralation between Alger Health and Cohen Steers
Assuming the 90 days horizon Alger Health Sciences is expected to generate 5.74 times more return on investment than Cohen Steers. However, Alger Health is 5.74 times more volatile than Cohen Steers Prfrd. It trades about 0.14 of its potential returns per unit of risk. Cohen Steers Prfrd is currently generating about 0.03 per unit of risk. If you would invest 1,337 in Alger Health Sciences on September 1, 2024 and sell it today you would earn a total of 33.00 from holding Alger Health Sciences or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Alger Health Sciences vs. Cohen Steers Prfrd
Performance |
| Timeline |
| Alger Health Sciences |
| Cohen Steers Prfrd |
Alger Health and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Cohen Steers
The main advantage of trading using opposite Alger Health and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Cohen Steers 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 Cohen Steers will offset losses from the drop in Cohen Steers' long position.| Alger Health vs. Small Cap Equity | Alger Health vs. Us Strategic Equity | Alger Health vs. Ultra Short Fixed Income | Alger Health vs. Calamos Global Equity |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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