Correlation Between Kopernik International and Alger Large

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Can any of the company-specific risk be diversified away by investing in both Kopernik International and Alger Large 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 Kopernik International and Alger Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kopernik International and Alger Large Cap, you can compare the effects of market volatilities on Kopernik International and Alger Large 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 Kopernik International with a short position of Alger Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kopernik International and Alger Large.

Diversification Opportunities for Kopernik International and Alger Large

KopernikAlgerDiversified AwayKopernikAlgerDiversified Away100%
-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between Kopernik and Alger is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kopernik International and Alger Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Large Cap and Kopernik International 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 Kopernik International are associated (or correlated) with Alger Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Large Cap has no effect on the direction of Kopernik International i.e., Kopernik International and Alger Large go up and down completely randomly.

Pair Corralation between Kopernik International and Alger Large

Assuming the 90 days horizon Kopernik International is expected to generate 5.47 times less return on investment than Alger Large. But when comparing it to its historical volatility, Kopernik International is 2.24 times less risky than Alger Large. It trades about 0.04 of its potential returns per unit of risk. Alger Large Cap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  7,191  in Alger Large Cap on November 21, 2024 and sell it today you would earn a total of  2,424  from holding Alger Large Cap or generate 33.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.56%
ValuesDaily Returns

Kopernik International  vs.  Alger Large Cap

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505
JavaScript chart by amCharts 3.21.15KGIRX AAGOX
       Timeline  
Kopernik International 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Kopernik International are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Kopernik International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb12.612.81313.213.4
Alger Large Cap 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Alger Large Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Alger Large may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb8890929496

Kopernik International and Alger Large Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.69-1.26-0.83-0.4-0.0070940.370.81.231.662.09 0.20.40.60.81.01.21.4
JavaScript chart by amCharts 3.21.15KGIRX AAGOX
       Returns  

Pair Trading with Kopernik International and Alger Large

The main advantage of trading using opposite Kopernik International and Alger Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kopernik International position performs unexpectedly, Alger Large 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 Large will offset losses from the drop in Alger Large's long position.
The idea behind Kopernik International and Alger Large Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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