Correlation Between Meritage and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Meritage 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 Meritage and Alger Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meritage and Alger Capital Appreciation, you can compare the effects of market volatilities on Meritage 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 Meritage with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meritage and Alger Capital.
Diversification Opportunities for Meritage and Alger Capital
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meritage and Alger is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Meritage 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 Meritage 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 Meritage 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 Meritage i.e., Meritage and Alger Capital go up and down completely randomly.
Pair Corralation between Meritage and Alger Capital
Considering the 90-day investment horizon Meritage is expected to generate 2.56 times more return on investment than Alger Capital. However, Meritage is 2.56 times more volatile than Alger Capital Appreciation. It trades about 0.12 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.26 per unit of risk. If you would invest 6,551 in Meritage on June 12, 2025 and sell it today you would earn a total of 1,303 from holding Meritage or generate 19.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meritage vs. Alger Capital Appreciation
Performance |
| Timeline |
| Meritage |
| Alger Capital Apprec |
Meritage and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meritage and Alger Capital
The main advantage of trading using opposite Meritage and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meritage 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.| Meritage vs. TRI Pointe Homes | Meritage vs. MI Homes | Meritage vs. Beazer Homes USA | Meritage vs. Century Communities |
| Alger Capital vs. American Century Etf | Alger Capital vs. Fidelity Small Cap | Alger Capital vs. Omni Small Cap Value | Alger Capital vs. Northern Small Cap |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |