Correlation Between Guggenheim Risk and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Guggenheim Risk and Alger Capital 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 Guggenheim Risk and Alger Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Risk Managed and Alger Capital Appreciation, you can compare the effects of market volatilities on Guggenheim Risk and Alger Capital 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 Guggenheim Risk with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Risk and Alger Capital.
Diversification Opportunities for Guggenheim Risk and Alger Capital
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Guggenheim and Alger is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Risk Managed and Alger Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Capital Apprec and Guggenheim Risk 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 Guggenheim Risk Managed are associated (or correlated) with Alger Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Capital Apprec has no effect on the direction of Guggenheim Risk i.e., Guggenheim Risk and Alger Capital go up and down completely randomly.
Pair Corralation between Guggenheim Risk and Alger Capital
Assuming the 90 days horizon Guggenheim Risk is expected to generate 3.27 times less return on investment than Alger Capital. But when comparing it to its historical volatility, Guggenheim Risk Managed is 1.24 times less risky than Alger Capital. It trades about 0.04 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,985 in Alger Capital Appreciation on September 13, 2024 and sell it today you would earn a total of 1,940 from holding Alger Capital Appreciation or generate 97.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Risk Managed vs. Alger Capital Appreciation
Performance |
| Timeline |
| Guggenheim Risk Managed |
| Alger Capital Apprec |
Guggenheim Risk and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Risk and Alger Capital
The main advantage of trading using opposite Guggenheim Risk and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Risk position performs unexpectedly, Alger Capital 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 Capital will offset losses from the drop in Alger Capital's long position.| Guggenheim Risk vs. Guggenheim Risk Managed | Guggenheim Risk vs. Guggenheim Risk Managed | Guggenheim Risk vs. Guggenheim Risk Managed | Guggenheim Risk vs. Lazard Global Listed |
| Alger Capital vs. Guggenheim Risk Managed | Alger Capital vs. Prudential Real Estate | Alger Capital vs. Redwood Real Estate | Alger Capital vs. Amg Managers Centersquare |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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