Correlation Between Alger Funds and The Hartford
Can any of the company-specific risk be diversified away by investing in both Alger Funds and The Hartford 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 Funds and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Alger Funds and The Hartford Small, you can compare the effects of market volatilities on Alger Funds and The Hartford 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 Funds with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Funds and The Hartford.
Diversification Opportunities for Alger Funds and The Hartford
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Alger and The is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding The Alger Funds and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small and Alger Funds 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 The Alger Funds are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small has no effect on the direction of Alger Funds i.e., Alger Funds and The Hartford go up and down completely randomly.
Pair Corralation between Alger Funds and The Hartford
Assuming the 90 days horizon Alger Funds is expected to generate 1.11 times less return on investment than The Hartford. In addition to that, Alger Funds is 1.09 times more volatile than The Hartford Small. It trades about 0.08 of its total potential returns per unit of risk. The Hartford Small is currently generating about 0.1 per unit of volatility. If you would invest 2,677 in The Hartford Small on September 3, 2024 and sell it today you would earn a total of 476.00 from holding The Hartford Small or generate 17.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Alger Funds vs. The Hartford Small
Performance |
| Timeline |
| Alger Funds |
| Hartford Small |
Alger Funds and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Funds and The Hartford
The main advantage of trading using opposite Alger Funds and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Funds position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Alger Funds vs. Intermediate Term Tax Free Bond | Alger Funds vs. Vanguard California Long Term | Alger Funds vs. Alliancebernstein National Municipal | Alger Funds vs. Victory High Income |
| The Hartford vs. The Hartford Midcap | The Hartford vs. Mfs Emerging Markets | The Hartford vs. Wells Fargo Special | The Hartford vs. Washington Mutual Investors |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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