Correlation Between Alger Capital and Alger Mid
Can any of the company-specific risk be diversified away by investing in both Alger Capital and Alger Mid 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 Capital and Alger Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Capital Appreciation and Alger Mid Cap, you can compare the effects of market volatilities on Alger Capital and Alger Mid 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 Capital with a short position of Alger Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Capital and Alger Mid.
Diversification Opportunities for Alger Capital and Alger Mid
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alger and Alger is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alger Capital Appreciation and Alger Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Mid Cap and Alger Capital 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 Capital Appreciation are associated (or correlated) with Alger Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Mid Cap has no effect on the direction of Alger Capital i.e., Alger Capital and Alger Mid go up and down completely randomly.
Pair Corralation between Alger Capital and Alger Mid
Assuming the 90 days horizon Alger Capital Appreciation is expected to under-perform the Alger Mid. In addition to that, Alger Capital is 1.73 times more volatile than Alger Mid Cap. It trades about -0.11 of its total potential returns per unit of risk. Alger Mid Cap is currently generating about -0.04 per unit of volatility. If you would invest 1,884 in Alger Mid Cap on September 26, 2024 and sell it today you would lose (34.00) from holding Alger Mid Cap or give up 1.8% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Alger Capital Appreciation vs. Alger Mid Cap
Performance |
Timeline |
Alger Capital Apprec |
Alger Mid Cap |
Alger Capital and Alger Mid Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alger Capital and Alger Mid
The main advantage of trading using opposite Alger Capital and Alger Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Capital position performs unexpectedly, Alger Mid 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 Mid will offset losses from the drop in Alger Mid's long position.Alger Capital vs. Alger Midcap Growth | Alger Capital vs. Alger Midcap Growth | Alger Capital vs. Alger Mid Cap | Alger Capital vs. Alger Small Cap |
Alger Mid vs. Alger Smallcap Growth | Alger Mid vs. Alger Capital Appreciation | Alger Mid vs. Janus Overseas Fund | Alger Mid vs. Allianzgi Nfj Small Cap |
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 CEOs Directory module to screen CEOs from public companies around the world.
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