Correlation Between Alger Balanced and Alger Concentrated

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

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

Diversification Opportunities for Alger Balanced and Alger Concentrated

0.0

Correlation Coefficient

Alger Balanced  Alger Concentrated

Pay attention - limited upside

The 3 months correlation between Alger and Alger is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alger Balanced Portfolio 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 Alger Balanced 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 Balanced Portfolio 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 Alger Balanced i.e., Alger Balanced and Alger Concentrated go up and down completely randomly.

Pair Corralation between Alger Balanced and Alger Concentrated

If you would invest  1,068  in Alger Concentrated Equity on September 3, 2024 and sell it today you would earn a total of  227.00  from holding Alger Concentrated Equity or generate 21.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Alger Balanced Portfolio  vs.  Alger Concentrated Equity

Alger Balanced Portfolio

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Alger Balanced Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Alger Balanced 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

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Concentrated Equity are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Alger Concentrated showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alger Balanced and Alger Concentrated

The main advantage of trading using opposite Alger Balanced and Alger Concentrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Balanced 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 Alger Balanced Portfolio 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.