Correlation Between Alger Health and Fisher Investments
Can any of the company-specific risk be diversified away by investing in both Alger Health and Fisher Investments 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 Fisher Investments 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 Fisher Large Cap, you can compare the effects of market volatilities on Alger Health and Fisher Investments 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 Fisher Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Fisher Investments.
Diversification Opportunities for Alger Health and Fisher Investments
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alger and Fisher is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Fisher Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Investments 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 Fisher Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Investments has no effect on the direction of Alger Health i.e., Alger Health and Fisher Investments go up and down completely randomly.
Pair Corralation between Alger Health and Fisher Investments
Assuming the 90 days horizon Alger Health Sciences is expected to under-perform the Fisher Investments. But the mutual fund apears to be less risky and, when comparing its historical volatility, Alger Health Sciences is 1.13 times less risky than Fisher Investments. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Fisher Large Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,444 in Fisher Large Cap on December 12, 2024 and sell it today you would earn a total of 219.00 from holding Fisher Large Cap or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Health Sciences vs. Fisher Large Cap
Performance |
| Timeline |
| Alger Health Sciences |
| Fisher Investments |
Alger Health and Fisher Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Fisher Investments
The main advantage of trading using opposite Alger Health and Fisher Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Fisher Investments 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 Fisher Investments will offset losses from the drop in Fisher Investments' long position.| Alger Health vs. Alger Midcap Growth | ||
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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