Correlation Between Alger Health and Calvert Large

Can any of the company-specific risk be diversified away by investing in both Alger Health and Calvert Large 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 Health and Calvert Large into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alger Health Sciences and Calvert Large Cap E, you can compare the effects of market volatilities on Alger Health and Calvert Large 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 Health with a short position of Calvert Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Calvert Large.

Diversification Opportunities for Alger Health and Calvert Large

0.17

Correlation Coefficient

Alger Health  Calvert Large

Average diversification

The 3 months correlation between Alger and Calvert is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Calvert Large Cap E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Large Cap and Alger Health 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 Health Sciences are associated (or correlated) with Calvert Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Large Cap has no effect on the direction of Alger Health i.e., Alger Health and Calvert Large go up and down completely randomly.

Pair Corralation between Alger Health and Calvert Large

Assuming the 90 days horizon Alger Health Sciences is expected to under-perform the Calvert Large. In addition to that, Alger Health is 1.03 times more volatile than Calvert Large Cap E. It trades about -0.02 of its total potential returns per unit of risk. Calvert Large Cap E is currently generating about 0.31 per unit of volatility. If you would invest  4,754  in Calvert Large Cap E on April 29, 2025 and sell it today you would earn a total of  749.00  from holding Calvert Large Cap E or generate 15.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Alger Health Sciences  vs.  Calvert Large Cap E

Alger Health Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alger Health Sciences has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Alger Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Calvert Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Large Cap E are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Calvert Large showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alger Health and Calvert Large

The main advantage of trading using opposite Alger Health and Calvert Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Health position performs unexpectedly, Calvert Large 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 Calvert Large will offset losses from the drop in Calvert Large's long position.

The idea behind Alger Health Sciences and Calvert Large Cap E pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.