Correlation Between Alger Health and Aim Counselor
Can any of the company-specific risk be diversified away by investing in both Alger Health and Aim Counselor 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 Aim Counselor 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 Aim Counselor Series, you can compare the effects of market volatilities on Alger Health and Aim Counselor 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 Aim Counselor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Aim Counselor.
Diversification Opportunities for Alger Health and Aim Counselor
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alger and Aim is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Aim Counselor Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Counselor Series 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 Aim Counselor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Counselor Series has no effect on the direction of Alger Health i.e., Alger Health and Aim Counselor go up and down completely randomly.
Pair Corralation between Alger Health and Aim Counselor
If you would invest 1,190 in Alger Health Sciences on September 4, 2024 and sell it today you would earn a total of 176.00 from holding Alger Health Sciences or generate 14.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Alger Health Sciences vs. Aim Counselor Series
Performance |
| Timeline |
| Alger Health Sciences |
| Aim Counselor Series |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alger Health and Aim Counselor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Aim Counselor
The main advantage of trading using opposite Alger Health and Aim Counselor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Aim Counselor 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 Aim Counselor will offset losses from the drop in Aim Counselor's long position.| Alger Health vs. Health Biotchnology Portfolio | Alger Health vs. Baron Health Care | Alger Health vs. Health Biotchnology Portfolio | Alger Health vs. Highland Longshort Healthcare |
| Aim Counselor vs. Health Biotchnology Portfolio | Aim Counselor vs. Alger Health Sciences | Aim Counselor vs. Baron Health Care | Aim Counselor vs. Eventide Healthcare Life |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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