Correlation Between Alger Health and Oklahoma College
Can any of the company-specific risk be diversified away by investing in both Alger Health and Oklahoma College 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 Oklahoma College 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 Oklahoma College Savings, you can compare the effects of market volatilities on Alger Health and Oklahoma College 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 Oklahoma College. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Oklahoma College.
Diversification Opportunities for Alger Health and Oklahoma College
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alger and Oklahoma is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Oklahoma College Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma College Savings 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 Oklahoma College. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oklahoma College Savings has no effect on the direction of Alger Health i.e., Alger Health and Oklahoma College go up and down completely randomly.
Pair Corralation between Alger Health and Oklahoma College
Assuming the 90 days horizon Alger Health is expected to generate 3.43 times less return on investment than Oklahoma College. In addition to that, Alger Health is 2.36 times more volatile than Oklahoma College Savings. It trades about 0.0 of its total potential returns per unit of risk. Oklahoma College Savings is currently generating about 0.04 per unit of volatility. If you would invest 950.00 in Oklahoma College Savings on September 13, 2024 and sell it today you would earn a total of 67.00 from holding Oklahoma College Savings or generate 7.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Health Sciences vs. Oklahoma College Savings
Performance |
| Timeline |
| Alger Health Sciences |
| Oklahoma College Savings |
Alger Health and Oklahoma College Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Oklahoma College
The main advantage of trading using opposite Alger Health and Oklahoma College positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Oklahoma College 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 Oklahoma College will offset losses from the drop in Oklahoma College's long position.| Alger Health vs. Dana Large Cap | Alger Health vs. Pace Large Value | Alger Health vs. Qs Large Cap | Alger Health vs. Cb Large Cap |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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