Correlation Between Conquer Risk and Alger Concentrated

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

By analyzing existing cross correlation between Conquer Risk Tactical and Alger Concentrated Equity, you can compare the effects of market volatilities on Conquer Risk and Alger Concentrated 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 Conquer Risk with a short position of Alger Concentrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conquer Risk and Alger Concentrated.

Diversification Opportunities for Conquer Risk and Alger Concentrated

0.88

Correlation Coefficient

Conquer Risk  Alger Concentrated

Very poor diversification

The 3 months correlation between Conquer and Alger is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Conquer Risk Tactical and Alger Concentrated Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Concentrated Equity and Conquer Risk 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 Conquer Risk Tactical are associated (or correlated) with Alger Concentrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Concentrated Equity has no effect on the direction of Conquer Risk i.e., Conquer Risk and Alger Concentrated go up and down completely randomly.

Pair Corralation between Conquer Risk and Alger Concentrated

Assuming the 90 days horizon Conquer Risk Tactical is expected to under-perform the Alger Concentrated. But the mutual fund apears to be less risky and, when comparing its historical volatility, Conquer Risk Tactical is 4.01 times less risky than Alger Concentrated. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Alger Concentrated Equity is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,292  in Alger Concentrated Equity on September 27, 2024 and sell it today you would earn a total of  60.00  from holding Alger Concentrated Equity or generate 4.64% return on investment over 90 days.

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

Conquer Risk Tactical  vs.  Alger Concentrated Equity

Conquer Risk Tactical

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Conquer Risk Tactical are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Conquer Risk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alger Concentrated Equity

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Concentrated Equity are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Alger Concentrated showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Conquer Risk and Alger Concentrated

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

The idea behind Conquer Risk Tactical and Alger Concentrated Equity 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.