Correlation Between Alger Health and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Alger Health and Growth Fund 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 Growth Fund 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 Growth Fund Growth, you can compare the effects of market volatilities on Alger Health and Growth Fund 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 Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Growth Fund.
Diversification Opportunities for Alger Health and Growth Fund
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alger and Growth is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Growth Fund Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund Growth 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund Growth has no effect on the direction of Alger Health i.e., Alger Health and Growth Fund go up and down completely randomly.
Pair Corralation between Alger Health and Growth Fund
Assuming the 90 days horizon Alger Health is expected to generate 43.0 times less return on investment than Growth Fund. But when comparing it to its historical volatility, Alger Health Sciences is 2.06 times less risky than Growth Fund. It trades about 0.0 of its potential returns per unit of risk. Growth Fund Growth is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,417 in Growth Fund Growth on October 25, 2024 and sell it today you would earn a total of 407.00 from holding Growth Fund Growth or generate 28.72% 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. Growth Fund Growth
Performance |
| Timeline |
| Alger Health Sciences |
| Growth Fund Growth |
Alger Health and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Growth Fund
The main advantage of trading using opposite Alger Health and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Growth Fund 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| Alger Health vs. Invesco Energy Fund | Alger Health vs. World Energy Fund | Alger Health vs. Thrivent Natural Resources | Alger Health vs. Cohen Steers Mlp |
| Growth Fund vs. Allianzgi Diversified Income | Growth Fund vs. Stone Ridge Diversified | Growth Fund vs. Guggenheim Diversified Income | Growth Fund vs. Lord Abbett Diversified |
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.
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