Correlation Between Alger Health and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Alger Health and Federated Kaufmann 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 Federated Kaufmann 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 Federated Kaufmann Large, you can compare the effects of market volatilities on Alger Health and Federated Kaufmann 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 Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Federated Kaufmann.
Diversification Opportunities for Alger Health and Federated Kaufmann
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alger and Federated is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Federated Kaufmann Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Large 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 Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Large has no effect on the direction of Alger Health i.e., Alger Health and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Alger Health and Federated Kaufmann
Assuming the 90 days horizon Alger Health Sciences is expected to under-perform the Federated Kaufmann. But the mutual fund apears to be less risky and, when comparing its historical volatility, Alger Health Sciences is 1.1 times less risky than Federated Kaufmann. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Federated Kaufmann Large is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,519 in Federated Kaufmann Large on April 24, 2025 and sell it today you would earn a total of 285.00 from holding Federated Kaufmann Large or generate 18.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Health Sciences vs. Federated Kaufmann Large
Performance |
| Timeline |
| Alger Health Sciences |
| Federated Kaufmann Large |
Alger Health and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Health and Federated Kaufmann
The main advantage of trading using opposite Alger Health and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Federated Kaufmann 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 Federated Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Alger Health vs. Morningstar Aggressive Growth | Alger Health vs. Dunham High Yield | Alger Health vs. Msift High Yield | Alger Health vs. Gmo High Yield |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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