Correlation Between Alger Funds and Alger Concentrated

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

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

Diversification Opportunities for Alger Funds and Alger Concentrated

0.0

Correlation Coefficient

Alger Funds  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 The Alger Funds 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 Funds 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 The Alger Funds 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 Funds i.e., Alger Funds and Alger Concentrated go up and down completely randomly.

Pair Corralation between Alger Funds and Alger Concentrated

If you would invest  1,039  in The Alger Funds on September 3, 2024 and sell it today you would earn a total of  158.00  from holding The Alger Funds or generate 15.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

The Alger Funds  vs.  Alger Concentrated Equity

Alger Funds

Risk-Adjusted Performance

14 of 100

Good

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

Alger Concentrated Equity

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Alger Concentrated Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Alger Concentrated is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alger Funds and Alger Concentrated

The main advantage of trading using opposite Alger Funds and Alger Concentrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Funds 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 The Alger Funds 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.