Correlation Between Us Strategic and Alger Health
Can any of the company-specific risk be diversified away by investing in both Us Strategic 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 Us Strategic and Alger Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Strategic Equity and Alger Health Sciences, you can compare the effects of market volatilities on Us Strategic 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 Us Strategic with a short position of Alger Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Strategic and Alger Health.
Diversification Opportunities for Us Strategic and Alger Health
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between RUSTX and Alger is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Us Strategic Equity 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 Us Strategic 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 Us Strategic Equity 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 Us Strategic i.e., Us Strategic and Alger Health go up and down completely randomly.
Pair Corralation between Us Strategic and Alger Health
Assuming the 90 days horizon Us Strategic Equity is expected to generate 0.96 times more return on investment than Alger Health. However, Us Strategic Equity is 1.04 times less risky than Alger Health. It trades about 0.35 of its potential returns per unit of risk. Alger Health Sciences is currently generating about 0.14 per unit of risk. If you would invest 1,777 in Us Strategic Equity on September 1, 2024 and sell it today you would earn a total of 106.00 from holding Us Strategic Equity or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Strategic Equity vs. Alger Health Sciences
Performance |
| Timeline |
| Us Strategic Equity |
| Alger Health Sciences |
Us Strategic and Alger Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Strategic and Alger Health
The main advantage of trading using opposite Us Strategic and Alger Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Strategic 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.| Us Strategic vs. International Developed Markets | Us Strategic vs. Global Real Estate | Us Strategic vs. Global Real Estate | Us Strategic vs. Growth Strategy Fund |
| Alger Health vs. Small Cap Equity | Alger Health vs. Us Strategic Equity | Alger Health vs. Ultra Short Fixed Income | Alger Health vs. Calamos Global Equity |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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