Correlation Between Alger Smidcap and Alger Dynamic

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

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

Diversification Opportunities for Alger Smidcap and Alger Dynamic

0.0

Correlation Coefficient

Alger Smidcap  Alger Dynamic

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 Smidcap Focus and Alger Dynamic Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Dynamic Opport and Alger Smidcap 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 Smidcap Focus are associated (or correlated) with Alger Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Dynamic Opport has no effect on the direction of Alger Smidcap i.e., Alger Smidcap and Alger Dynamic go up and down completely randomly.

Pair Corralation between Alger Smidcap and Alger Dynamic

If you would invest  1,999  in Alger Dynamic Opportunities on September 3, 2024 and sell it today you would earn a total of  221.00  from holding Alger Dynamic Opportunities or generate 11.06% return on investment over 90 days.

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

Alger Smidcap Focus  vs.  Alger Dynamic Opportunities

Alger Smidcap Focus

Risk-Adjusted Performance

0 of 100

Good

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

Alger Dynamic Opport

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Dynamic Opportunities 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 Dynamic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Alger Smidcap and Alger Dynamic

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

The idea behind Alger Smidcap Focus and Alger Dynamic Opportunities 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.