Correlation Between Alger Health and Hundredfold Select
Can any of the company-specific risk be diversified away by investing in both Alger Health and Hundredfold Select 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 Hundredfold Select 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 Hundredfold Select Alternative, you can compare the effects of market volatilities on Alger Health and Hundredfold Select 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 Hundredfold Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Hundredfold Select.
Diversification Opportunities for Alger Health and Hundredfold Select
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alger and Hundredfold is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Hundredfold Select Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hundredfold Select 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 Hundredfold Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hundredfold Select has no effect on the direction of Alger Health i.e., Alger Health and Hundredfold Select go up and down completely randomly.
Pair Corralation between Alger Health and Hundredfold Select
Assuming the 90 days horizon Alger Health is expected to generate 4.17 times less return on investment than Hundredfold Select. In addition to that, Alger Health is 2.23 times more volatile than Hundredfold Select Alternative. It trades about 0.01 of its total potential returns per unit of risk. Hundredfold Select Alternative is currently generating about 0.07 per unit of volatility. If you would invest 2,050 in Hundredfold Select Alternative on September 4, 2024 and sell it today you would earn a total of 276.00 from holding Hundredfold Select Alternative or generate 13.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Health Sciences vs. Hundredfold Select Alternative
Performance |
| Timeline |
| Alger Health Sciences |
| Hundredfold Select |
Alger Health and Hundredfold Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Hundredfold Select
The main advantage of trading using opposite Alger Health and Hundredfold Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Hundredfold Select 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 Hundredfold Select will offset losses from the drop in Hundredfold Select'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 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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