Correlation Between Matson Money and Alger Spectra
Can any of the company-specific risk be diversified away by investing in both Matson Money and Alger Spectra 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 Matson Money and Alger Spectra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matson Money Equity and Alger Spectra Fund, you can compare the effects of market volatilities on Matson Money and Alger Spectra 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 Matson Money with a short position of Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Alger Spectra.
Diversification Opportunities for Matson Money and Alger Spectra
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Matson and Alger is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and Alger Spectra Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra and Matson Money 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 Matson Money Equity are associated (or correlated) with Alger Spectra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Spectra has no effect on the direction of Matson Money i.e., Matson Money and Alger Spectra go up and down completely randomly.
Pair Corralation between Matson Money and Alger Spectra
Assuming the 90 days horizon Matson Money is expected to generate 2.18 times less return on investment than Alger Spectra. But when comparing it to its historical volatility, Matson Money Equity is 1.3 times less risky than Alger Spectra. It trades about 0.23 of its potential returns per unit of risk. Alger Spectra Fund is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 2,414 in Alger Spectra Fund on April 16, 2025 and sell it today you would earn a total of 873.00 from holding Alger Spectra Fund or generate 36.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matson Money Equity vs. Alger Spectra Fund
Performance |
| Timeline |
| Matson Money Equity |
| Alger Spectra |
Matson Money and Alger Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matson Money and Alger Spectra
The main advantage of trading using opposite Matson Money and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money position performs unexpectedly, Alger Spectra 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 Spectra will offset losses from the drop in Alger Spectra's long position.| Matson Money vs. Artisan High Income | Matson Money vs. Multisector Bond Sma | Matson Money vs. California Municipal Portfolio | Matson Money vs. Ultra Short Term Fixed |
| Alger Spectra vs. Columbia Convertible Securities | Alger Spectra vs. Allianzgi Convertible Income | Alger Spectra vs. Virtus Convertible | Alger Spectra vs. Calamos Dynamic Convertible |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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