Correlation Between Boston Partners and Alger Spectra

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

By analyzing existing cross correlation between Boston Partners Small and Alger Spectra, you can compare the effects of market volatilities on Boston Partners 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 Boston Partners with a short position of Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Alger Spectra.

Diversification Opportunities for Boston Partners and Alger Spectra

0.51

Correlation Coefficient

Boston Partners  Alger Spectra

Very weak diversification

The 3 months correlation between Boston and Alger is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small and Alger Spectra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra and Boston Partners 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 Boston Partners Small 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 Boston Partners i.e., Boston Partners and Alger Spectra go up and down completely randomly.

Pair Corralation between Boston Partners and Alger Spectra

Assuming the 90 days horizon Boston Partners is expected to generate 5.19 times less return on investment than Alger Spectra. But when comparing it to its historical volatility, Boston Partners Small is 1.12 times less risky than Alger Spectra. It trades about 0.06 of its potential returns per unit of risk. Alger Spectra is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  3,076  in Alger Spectra on May 11, 2025 and sell it today you would earn a total of  642.00  from holding Alger Spectra or generate 20.87% return on investment over 90 days.

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

Boston Partners Small  vs.  Alger Spectra

Boston Partners Small

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Partners Small are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Boston Partners is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alger Spectra

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Spectra are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Alger Spectra showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boston Partners and Alger Spectra

The main advantage of trading using opposite Boston Partners and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners 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 idea behind Boston Partners Small and Alger Spectra 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..