Correlation Between NYSE Composite and Alger Concentrated
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Alger Concentrated 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 NYSE Composite and Alger Concentrated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Alger Concentrated Equity, you can compare the effects of market volatilities on NYSE Composite and Alger Concentrated 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 NYSE Composite with a short position of Alger Concentrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Alger Concentrated.
Diversification Opportunities for NYSE Composite and Alger Concentrated
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Alger is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Alger Concentrated Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Concentrated Equity and NYSE Composite 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 NYSE Composite are associated (or correlated) with Alger Concentrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Concentrated Equity has no effect on the direction of NYSE Composite i.e., NYSE Composite and Alger Concentrated go up and down completely randomly.
Pair Corralation between NYSE Composite and Alger Concentrated
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.66 times less return on investment than Alger Concentrated. But when comparing it to its historical volatility, NYSE Composite is 1.85 times less risky than Alger Concentrated. It trades about 0.08 of its potential returns per unit of risk. Alger Concentrated Equity is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,018 in Alger Concentrated Equity on September 2, 2024 and sell it today you would earn a total of 275.00 from holding Alger Concentrated Equity or generate 27.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 33.67% |
| Values | Daily Returns |
NYSE Composite vs. Alger Concentrated Equity
Performance |
| Timeline |
NYSE Composite and Alger Concentrated Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Alger Concentrated Equity
Pair trading matchups for Alger Concentrated
Pair Trading with NYSE Composite and Alger Concentrated
The main advantage of trading using opposite NYSE Composite and Alger Concentrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Alger Concentrated 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 Concentrated will offset losses from the drop in Alger Concentrated's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Alger Concentrated vs. Alger Midcap Growth | Alger Concentrated vs. Alger Midcap Growth | Alger Concentrated vs. Alger Mid Cap | Alger Concentrated vs. Alger Small Cap |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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