Correlation Between The Hartford and Alger Spectra
Can any of the company-specific risk be diversified away by investing in both The Hartford 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 The Hartford and Alger Spectra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Healthcare and Alger Spectra, you can compare the effects of market volatilities on The Hartford 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 The Hartford with a short position of Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Alger Spectra.
Diversification Opportunities for The Hartford and Alger Spectra
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between The and Alger is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Healthcare and Alger Spectra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra and The Hartford 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 The Hartford Healthcare 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 The Hartford i.e., The Hartford and Alger Spectra go up and down completely randomly.
Pair Corralation between The Hartford and Alger Spectra
Assuming the 90 days horizon The Hartford Healthcare is expected to under-perform the Alger Spectra. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Hartford Healthcare is 1.78 times less risky than Alger Spectra. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Alger Spectra is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,687 in Alger Spectra on April 21, 2025 and sell it today you would earn a total of 861.00 from holding Alger Spectra or generate 32.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Healthcare vs. Alger Spectra
Performance |
| Timeline |
| The Hartford Healthcare |
| Alger Spectra |
The Hartford and Alger Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Alger Spectra
The main advantage of trading using opposite The Hartford and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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.| The Hartford vs. The Hartford Healthcare | The Hartford vs. Hartford Healthcare Hls | The Hartford vs. The Hartford Global | The Hartford vs. Hartford Healthcare Hls |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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