Correlation Between Highland Longshort and Alger Health
Can any of the company-specific risk be diversified away by investing in both Highland Longshort and Alger Health 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 Highland Longshort and Alger Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Longshort Healthcare and Alger Health Sciences, you can compare the effects of market volatilities on Highland Longshort and Alger Health 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 Highland Longshort with a short position of Alger Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Longshort and Alger Health.
Diversification Opportunities for Highland Longshort and Alger Health
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Highland and Alger is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Alger Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Health Sciences and Highland Longshort 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 Highland Longshort Healthcare are associated (or correlated) with Alger Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Health Sciences has no effect on the direction of Highland Longshort i.e., Highland Longshort and Alger Health go up and down completely randomly.
Pair Corralation between Highland Longshort and Alger Health
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 0.26 times more return on investment than Alger Health. However, Highland Longshort Healthcare is 3.91 times less risky than Alger Health. It trades about 0.11 of its potential returns per unit of risk. Alger Health Sciences is currently generating about -0.02 per unit of risk. If you would invest 1,611 in Highland Longshort Healthcare on October 25, 2024 and sell it today you would earn a total of 45.00 from holding Highland Longshort Healthcare or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Alger Health Sciences
Performance |
| Timeline |
| Highland Longshort |
| Alger Health Sciences |
Highland Longshort and Alger Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Longshort and Alger Health
The main advantage of trading using opposite Highland Longshort and Alger Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Longshort position performs unexpectedly, Alger Health 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 Health will offset losses from the drop in Alger Health's long position.| Highland Longshort vs. Artisan Small Cap | Highland Longshort vs. Nuveen Small Cap | Highland Longshort vs. Smallcap Fund Fka | Highland Longshort vs. Touchstone Small Cap |
| Alger Health vs. Invesco Energy Fund | Alger Health vs. World Energy Fund | Alger Health vs. Thrivent Natural Resources | Alger Health vs. Cohen Steers Mlp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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