Correlation Between Alger Health and Voya High
Can any of the company-specific risk be diversified away by investing in both Alger Health and Voya High 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 Voya High 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 Voya High Yield, you can compare the effects of market volatilities on Alger Health and Voya High 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 Voya High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Voya High.
Diversification Opportunities for Alger Health and Voya High
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alger and Voya is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Voya High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya High Yield 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 Voya High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya High Yield has no effect on the direction of Alger Health i.e., Alger Health and Voya High go up and down completely randomly.
Pair Corralation between Alger Health and Voya High
Assuming the 90 days horizon Alger Health is expected to generate 1.04 times less return on investment than Voya High. In addition to that, Alger Health is 5.44 times more volatile than Voya High Yield. It trades about 0.04 of its total potential returns per unit of risk. Voya High Yield is currently generating about 0.21 per unit of volatility. If you would invest 869.00 in Voya High Yield on August 24, 2024 and sell it today you would earn a total of 6.00 from holding Voya High Yield or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Health Sciences vs. Voya High Yield
Performance |
| Timeline |
| Alger Health Sciences |
| Voya High Yield |
Alger Health and Voya High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Voya High
The main advantage of trading using opposite Alger Health and Voya High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Voya High 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 Voya High will offset losses from the drop in Voya High's long position.| Alger Health vs. Victory Rs Partners | Alger Health vs. Small Cap Value Series | Alger Health vs. Boston Partners Small | Alger Health vs. Lord Abbett Small |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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