Correlation Between Empire State and Alger Spectra
Can any of the company-specific risk be diversified away by investing in both Empire State and Alger Spectra 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 Empire State and Alger Spectra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Alger Spectra Fund, you can compare the effects of market volatilities on Empire State and Alger Spectra 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 Empire State with a short position of Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Alger Spectra.
Diversification Opportunities for Empire State and Alger Spectra
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Alger is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Alger Spectra Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra and Empire State 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 Empire State Realty are associated (or correlated) with Alger Spectra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Spectra has no effect on the direction of Empire State i.e., Empire State and Alger Spectra go up and down completely randomly.
Pair Corralation between Empire State and Alger Spectra
Given the investment horizon of 90 days Empire State is expected to generate 2.49 times less return on investment than Alger Spectra. But when comparing it to its historical volatility, Empire State Realty is 1.08 times less risky than Alger Spectra. It trades about 0.09 of its potential returns per unit of risk. Alger Spectra Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,813 in Alger Spectra Fund on August 29, 2024 and sell it today you would earn a total of 178.00 from holding Alger Spectra Fund or generate 6.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. Alger Spectra Fund
Performance |
| Timeline |
| Empire State Realty |
| Alger Spectra |
Empire State and Alger Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Alger Spectra
The main advantage of trading using opposite Empire State and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Alger Spectra 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 Alger Spectra will offset losses from the drop in Alger Spectra's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Alger Spectra vs. White Oak Select | Alger Spectra vs. Victory Rs Small | Alger Spectra vs. Alger Capital Appreciation | Alger Spectra vs. Reynolds Blue Chip |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |