Correlation Between Columbia High and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Columbia High and Alger Capital 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 Columbia High and Alger Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia High Yield and Alger Capital Appreciation, you can compare the effects of market volatilities on Columbia High and Alger Capital 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 Columbia High with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia High and Alger Capital.
Diversification Opportunities for Columbia High and Alger Capital
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Columbia and Alger is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Columbia High Yield and Alger Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Capital Apprec and Columbia High 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 Columbia High Yield are associated (or correlated) with Alger Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Capital Apprec has no effect on the direction of Columbia High i.e., Columbia High and Alger Capital go up and down completely randomly.
Pair Corralation between Columbia High and Alger Capital
Assuming the 90 days horizon Columbia High is expected to generate 4.15 times less return on investment than Alger Capital. But when comparing it to its historical volatility, Columbia High Yield is 6.33 times less risky than Alger Capital. It trades about 0.14 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,996 in Alger Capital Appreciation on March 29, 2025 and sell it today you would earn a total of 6,007 from holding Alger Capital Appreciation or generate 85.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia High Yield vs. Alger Capital Appreciation
Performance |
| Timeline |
| Columbia High Yield |
| Alger Capital Apprec |
Columbia High and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia High and Alger Capital
The main advantage of trading using opposite Columbia High and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia High position performs unexpectedly, Alger Capital 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 Capital will offset losses from the drop in Alger Capital's long position.| Columbia High vs. Us Government Securities | Columbia High vs. Voya Government Money | Columbia High vs. Sit Government Securities | Columbia High vs. Us Government Securities |
| Alger Capital vs. Sa Worldwide Moderate | Alger Capital vs. College Retirement Equities | Alger Capital vs. Moderate Balanced Allocation | Alger Capital vs. American Funds Retirement |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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