Correlation Between Alger Health and Jensen Quality
Can any of the company-specific risk be diversified away by investing in both Alger Health and Jensen Quality 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 Jensen Quality 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 Jensen Quality Value, you can compare the effects of market volatilities on Alger Health and Jensen Quality 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 Jensen Quality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Jensen Quality.
Diversification Opportunities for Alger Health and Jensen Quality
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alger and Jensen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Jensen Quality Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Quality Value 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 Jensen Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Quality Value has no effect on the direction of Alger Health i.e., Alger Health and Jensen Quality go up and down completely randomly.
Pair Corralation between Alger Health and Jensen Quality
Assuming the 90 days horizon Alger Health Sciences is expected to under-perform the Jensen Quality. But the mutual fund apears to be less risky and, when comparing its historical volatility, Alger Health Sciences is 1.08 times less risky than Jensen Quality. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Jensen Quality Value is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,947 in Jensen Quality Value on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Jensen Quality Value or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Alger Health Sciences vs. Jensen Quality Value
Performance |
| Timeline |
| Alger Health Sciences |
| Jensen Quality Value |
Alger Health and Jensen Quality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Jensen Quality
The main advantage of trading using opposite Alger Health and Jensen Quality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Jensen Quality 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 Jensen Quality will offset losses from the drop in Jensen Quality'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 |
| Jensen Quality vs. Blackrock Health Sciences | Jensen Quality vs. Baillie Gifford Health | Jensen Quality vs. Alger Health Sciences | Jensen Quality vs. Live Oak Health |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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