Correlation Between Alger Health and Jhancock Diversified
Can any of the company-specific risk be diversified away by investing in both Alger Health and Jhancock Diversified 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 Jhancock Diversified 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 Jhancock Diversified Macro, you can compare the effects of market volatilities on Alger Health and Jhancock Diversified 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 Jhancock Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Jhancock Diversified.
Diversification Opportunities for Alger Health and Jhancock Diversified
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alger and Jhancock is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Jhancock Diversified Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Diversified 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 Jhancock Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Diversified has no effect on the direction of Alger Health i.e., Alger Health and Jhancock Diversified go up and down completely randomly.
Pair Corralation between Alger Health and Jhancock Diversified
Assuming the 90 days horizon Alger Health Sciences is expected to generate 1.62 times more return on investment than Jhancock Diversified. However, Alger Health is 1.62 times more volatile than Jhancock Diversified Macro. It trades about 0.14 of its potential returns per unit of risk. Jhancock Diversified Macro is currently generating about 0.13 per unit of risk. If you would invest 1,296 in Alger Health Sciences on November 4, 2024 and sell it today you would earn a total of 32.00 from holding Alger Health Sciences or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Health Sciences vs. Jhancock Diversified Macro
Performance |
| Timeline |
| Alger Health Sciences |
| Jhancock Diversified |
Alger Health and Jhancock Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Jhancock Diversified
The main advantage of trading using opposite Alger Health and Jhancock Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Jhancock Diversified 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 Jhancock Diversified will offset losses from the drop in Jhancock Diversified's long position.| Alger Health vs. Rbc Bluebay Emerging | Alger Health vs. Chartwell Short Duration | Alger Health vs. Massmutual Premier High | Alger Health vs. Ambrus Core Bond |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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