Correlation Between Aqr Large and Alger Spectra
Can any of the company-specific risk be diversified away by investing in both Aqr Large 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 Aqr Large and Alger Spectra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Large Cap and Alger Spectra Fund, you can compare the effects of market volatilities on Aqr Large 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 Aqr Large with a short position of Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Alger Spectra.
Diversification Opportunities for Aqr Large and Alger Spectra
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AQR and Alger is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Alger Spectra Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra and Aqr Large 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 Aqr Large Cap 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 Aqr Large i.e., Aqr Large and Alger Spectra go up and down completely randomly.
Pair Corralation between Aqr Large and Alger Spectra
Assuming the 90 days horizon Aqr Large is expected to generate 1.48 times less return on investment than Alger Spectra. In addition to that, Aqr Large is 1.02 times more volatile than Alger Spectra Fund. It trades about 0.08 of its total potential returns per unit of risk. Alger Spectra Fund is currently generating about 0.12 per unit of volatility. If you would invest 1,642 in Alger Spectra Fund on August 28, 2024 and sell it today you would earn a total of 1,567 from holding Alger Spectra Fund or generate 95.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. Alger Spectra Fund
Performance |
| Timeline |
| Aqr Large Cap |
| Alger Spectra |
Aqr Large and Alger Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Alger Spectra
The main advantage of trading using opposite Aqr Large and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large 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.| Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive |
| Alger Spectra vs. Ab Bond Inflation | Alger Spectra vs. Aqr Managed Futures | Alger Spectra vs. Short Duration Inflation | Alger Spectra vs. Atac Inflation Rotation |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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