Correlation Between Alger Health and Dataax

Can any of the company-specific risk be diversified away by investing in both Alger Health and Dataax 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 Dataax 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 Dataax, you can compare the effects of market volatilities on Alger Health and Dataax 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 Dataax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Health and Dataax.

Diversification Opportunities for Alger Health and Dataax

0.14

Correlation Coefficient

Alger Health  Dataax

Average diversification

The 3 months correlation between Alger and Dataax is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Alger Health Sciences and Dataax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataax 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 Dataax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataax has no effect on the direction of Alger Health i.e., Alger Health and Dataax go up and down completely randomly.

Pair Corralation between Alger Health and Dataax

Assuming the 90 days horizon Alger Health Sciences is expected to under-perform the Dataax. But the mutual fund apears to be less risky and, when comparing its historical volatility, Alger Health Sciences is 1.44 times less risky than Dataax. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Dataax is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  830.00  in Dataax on April 30, 2025 and sell it today you would earn a total of  243.00  from holding Dataax or generate 29.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.8%
Values	Daily Returns

Alger Health Sciences  vs.  Dataax

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.

Dataax

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dataax are ranked lower than 31 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dataax showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alger Health and Dataax

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

The idea behind Alger Health Sciences and Dataax 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.