Correlation Between Alger Spectra and World Energy
Can any of the company-specific risk be diversified away by investing in both Alger Spectra and World Energy 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 Spectra and World Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Spectra Fund and World Energy Fund, you can compare the effects of market volatilities on Alger Spectra and World Energy 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 Spectra with a short position of World Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Spectra and World Energy.
Diversification Opportunities for Alger Spectra and World Energy
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alger and World is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Alger Spectra Fund and World Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Energy and Alger Spectra 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 Spectra Fund are associated (or correlated) with World Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Energy has no effect on the direction of Alger Spectra i.e., Alger Spectra and World Energy go up and down completely randomly.
Pair Corralation between Alger Spectra and World Energy
Assuming the 90 days horizon Alger Spectra Fund is expected to generate 1.11 times more return on investment than World Energy. However, Alger Spectra is 1.11 times more volatile than World Energy Fund. It trades about 0.17 of its potential returns per unit of risk. World Energy Fund is currently generating about 0.1 per unit of risk. If you would invest 3,117 in Alger Spectra Fund on June 6, 2025 and sell it today you would earn a total of 358.00 from holding Alger Spectra Fund or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Spectra Fund vs. World Energy Fund
Performance |
| Timeline |
| Alger Spectra |
| World Energy |
Alger Spectra and World Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Spectra and World Energy
The main advantage of trading using opposite Alger Spectra and World Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Spectra position performs unexpectedly, World Energy 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 World Energy will offset losses from the drop in World Energy's long position.| Alger Spectra vs. Aig Government Money | Alger Spectra vs. Hsbc Treasury Money | Alger Spectra vs. Franklin Government Money | Alger Spectra vs. Dws Government Money |
| World Energy vs. Bond Fund Investor | World Energy vs. Strategic Enhanced Yield | World Energy vs. Cavanal Hill Hedged | World Energy vs. Limited Duration Fund |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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