Correlation Between Falcon Focus and Alger Mid

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

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

Diversification Opportunities for Falcon Focus and Alger Mid

0.0

Correlation Coefficient

Falcon Focus  Alger Mid

Pay attention - limited upside

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

Pair Corralation between Falcon Focus and Alger Mid

If you would invest  1,126  in Alger Mid Cap on September 13, 2024 and sell it today you would earn a total of  253.00  from holding Alger Mid Cap or generate 22.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Falcon Focus Scv  vs.  Alger Mid Cap

Falcon Focus Scv

Risk-Adjusted Performance

0 of 100

Very Weak

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

Alger Mid Cap

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Mid Cap are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Alger Mid showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Falcon Focus and Alger Mid

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

The idea behind Falcon Focus Scv and Alger Mid Cap 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.