Correlation Between Fisher Investments and Alger Health

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

Diversification Opportunities for Fisher Investments and Alger Health

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Fisher and Alger is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Large Cap 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 Fisher Investments 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 Fisher Large Cap 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 Fisher Investments i.e., Fisher Investments and Alger Health go up and down completely randomly.

Pair Corralation between Fisher Investments and Alger Health

Assuming the 90 days horizon Fisher Large Cap is expected to under-perform the Alger Health. In addition to that, Fisher Investments is 1.18 times more volatile than Alger Health Sciences. It trades about -0.29 of its total potential returns per unit of risk. Alger Health Sciences is currently generating about -0.12 per unit of volatility. If you would invest  1,339  in Alger Health Sciences on October 11, 2024 and sell it today you would lose (31.00) from holding Alger Health Sciences or give up 2.32% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

Fisher Large Cap  vs.  Alger Health Sciences

 Performance 
       Timeline  
Fisher Investments 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Fisher Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fisher Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Alger Health Sciences 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Alger Health Sciences has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Alger Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fisher Investments and Alger Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fisher Investments and Alger Health

The main advantage of trading using opposite Fisher Investments and Alger Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Investments 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.
The idea behind Fisher Large Cap and Alger Health Sciences 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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