Correlation Between Alger Health and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Alger Health and Mainstay Moderate 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 Moderate 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 Moderate Allocation, you can compare the effects of market volatilities on Alger Health and Mainstay Moderate 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 Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Mainstay Moderate.
Diversification Opportunities for Alger Health and Mainstay Moderate
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Alger and Mainstay is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Mainstay Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate 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 Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate has no effect on the direction of Alger Health i.e., Alger Health and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Alger Health and Mainstay Moderate
Assuming the 90 days horizon Alger Health is expected to generate 5.33 times less return on investment than Mainstay Moderate. In addition to that, Alger Health is 1.51 times more volatile than Mainstay Moderate Allocation. It trades about 0.02 of its total potential returns per unit of risk. Mainstay Moderate Allocation is currently generating about 0.13 per unit of volatility. If you would invest 1,377 in Mainstay Moderate Allocation on September 1, 2024 and sell it today you would earn a total of 116.00 from holding Mainstay Moderate Allocation or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Alger Health Sciences vs. Mainstay Moderate Allocation
Performance |
| Timeline |
| Alger Health Sciences |
| Mainstay Moderate |
Alger Health and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Mainstay Moderate
The main advantage of trading using opposite Alger Health and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Mainstay Moderate 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 Moderate will offset losses from the drop in Mainstay Moderate's long position.| Alger Health vs. Small Cap Equity | Alger Health vs. Us Strategic Equity | Alger Health vs. Ultra Short Fixed Income | Alger Health vs. Calamos Global Equity |
| Mainstay Moderate vs. Mainstay Tax Free | Mainstay Moderate vs. Mainstay Large Cap | Mainstay Moderate vs. Mainstay Large Cap | Mainstay Moderate vs. Mainstay Large Cap |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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