Correlation Between Alger Health and Simt Large
Can any of the company-specific risk be diversified away by investing in both Alger Health and Simt Large 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 Health and Simt Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Health Sciences and Simt Large Cap, you can compare the effects of market volatilities on Alger Health and Simt Large 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 Health with a short position of Simt Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Simt Large.
Diversification Opportunities for Alger Health and Simt Large
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alger and Simt is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Simt Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Large Cap and Alger Health 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 Health Sciences are associated (or correlated) with Simt Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Large Cap has no effect on the direction of Alger Health i.e., Alger Health and Simt Large go up and down completely randomly.
Pair Corralation between Alger Health and Simt Large
Assuming the 90 days horizon Alger Health is expected to generate 1.92 times less return on investment than Simt Large. In addition to that, Alger Health is 1.03 times more volatile than Simt Large Cap. It trades about 0.1 of its total potential returns per unit of risk. Simt Large Cap is currently generating about 0.19 per unit of volatility. If you would invest 2,603 in Simt Large Cap on May 27, 2025 and sell it today you would earn a total of 224.00 from holding Simt Large Cap or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Alger Health Sciences vs. Simt Large Cap
Performance |
| Timeline |
| Alger Health Sciences |
| Simt Large Cap |
Alger Health and Simt Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Simt Large
The main advantage of trading using opposite Alger Health and Simt Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Simt Large 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 Simt Large will offset losses from the drop in Simt Large's long position.| Alger Health vs. Icon Financial Fund | Alger Health vs. Gabelli Global Financial | Alger Health vs. Financial Industries Fund | Alger Health vs. John Hancock Financial |
| Simt Large vs. Blackrock Emerging Markets | Simt Large vs. Siit Emerging Markets | Simt Large vs. Fidelity New Markets | Simt Large vs. Delaware Limited Term Diversified |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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