Correlation Between Alger Health and Western Asset
Can any of the company-specific risk be diversified away by investing in both Alger Health and Western Asset 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 Western Asset 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 Western Asset Inflation, you can compare the effects of market volatilities on Alger Health and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Western Asset.
Diversification Opportunities for Alger Health and Western Asset
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alger and Western is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Inflation has no effect on the direction of Alger Health i.e., Alger Health and Western Asset go up and down completely randomly.
Pair Corralation between Alger Health and Western Asset
Assuming the 90 days horizon Alger Health Sciences is expected to generate 2.12 times more return on investment than Western Asset. However, Alger Health is 2.12 times more volatile than Western Asset Inflation. It trades about 0.01 of its potential returns per unit of risk. Western Asset Inflation is currently generating about 0.01 per unit of risk. If you would invest 1,335 in Alger Health Sciences on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Alger Health Sciences or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Health Sciences vs. Western Asset Inflation
Performance |
| Timeline |
| Alger Health Sciences |
| Western Asset Inflation |
Alger Health and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Western Asset
The main advantage of trading using opposite Alger Health and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Alger Health vs. Harbor Vertible Securities | Alger Health vs. Franklin Vertible Securities | Alger Health vs. Absolute Convertible Arbitrage | Alger Health vs. Teton Vertible Securities |
| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |