Correlation Between Alger Global and Jhancock Diversified

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

Diversification Opportunities for Alger Global and Jhancock Diversified

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Alger and Jhancock is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Alger Global Growth and Jhancock Diversified Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Diversified and Alger Global 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 Alger Global Growth are associated (or correlated) with Jhancock Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Diversified has no effect on the direction of Alger Global i.e., Alger Global and Jhancock Diversified go up and down completely randomly.

Pair Corralation between Alger Global and Jhancock Diversified

Assuming the 90 days horizon Alger Global Growth is expected to generate 1.42 times more return on investment than Jhancock Diversified. However, Alger Global is 1.42 times more volatile than Jhancock Diversified Macro. It trades about 0.26 of its potential returns per unit of risk. Jhancock Diversified Macro is currently generating about 0.08 per unit of risk. If you would invest  3,134  in Alger Global Growth on September 6, 2024 and sell it today you would earn a total of  431.00  from holding Alger Global Growth or generate 13.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Alger Global Growth  vs.  Jhancock Diversified Macro

 Performance 
       Timeline  
Alger Global Growth 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Alger Global Growth are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Alger Global showed solid returns over the last few months and may actually be approaching a breakup point.
Jhancock Diversified 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Jhancock Diversified Macro are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jhancock Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alger Global and Jhancock Diversified Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alger Global and Jhancock Diversified

The main advantage of trading using opposite Alger Global and Jhancock Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Global position performs unexpectedly, Jhancock Diversified 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 Jhancock Diversified will offset losses from the drop in Jhancock Diversified's long position.
The idea behind Alger Global Growth and Jhancock Diversified Macro 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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