Correlation Between Alger Health and Mainstay Large
Can any of the company-specific risk be diversified away by investing in both Alger Health and Mainstay Large 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 Mainstay Large 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 Mainstay Large Cap, you can compare the effects of market volatilities on Alger Health and Mainstay Large 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 Mainstay Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Mainstay Large.
Diversification Opportunities for Alger Health and Mainstay Large
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alger and Mainstay is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Mainstay Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Large Cap 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 Mainstay Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Large Cap has no effect on the direction of Alger Health i.e., Alger Health and Mainstay Large go up and down completely randomly.
Pair Corralation between Alger Health and Mainstay Large
Assuming the 90 days horizon Alger Health Sciences is expected to generate 0.32 times more return on investment than Mainstay Large. However, Alger Health Sciences is 3.16 times less risky than Mainstay Large. It trades about -0.07 of its potential returns per unit of risk. Mainstay Large Cap is currently generating about -0.12 per unit of risk. If you would invest 1,362 in Alger Health Sciences on November 3, 2024 and sell it today you would lose (34.00) from holding Alger Health Sciences or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Alger Health Sciences vs. Mainstay Large Cap
Performance |
| Timeline |
| Alger Health Sciences |
| Mainstay Large Cap |
Alger Health and Mainstay Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Mainstay Large
The main advantage of trading using opposite Alger Health and Mainstay Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Mainstay Large 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 Mainstay Large will offset losses from the drop in Mainstay Large'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 |
| Mainstay Large vs. Baron Health Care | Mainstay Large vs. Allianzgi Health Sciences | Mainstay Large vs. Vanguard Health Care | Mainstay Large vs. Alger Health Sciences |
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.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |