Correlation Between Allianzgi Nfj and Alger Capital

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

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

Diversification Opportunities for Allianzgi Nfj and Alger Capital

0.86

Correlation Coefficient

Allianzgi Nfj  Alger Capital

Very poor diversification

The 3 months correlation between Allianzgi and Alger is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Nfj Small Cap and Alger Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Capital Apprec and Allianzgi Nfj 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 Allianzgi Nfj Small Cap are associated (or correlated) with Alger Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Capital Apprec has no effect on the direction of Allianzgi Nfj i.e., Allianzgi Nfj and Alger Capital go up and down completely randomly.

Pair Corralation between Allianzgi Nfj and Alger Capital

Assuming the 90 days horizon Allianzgi Nfj is expected to generate 1.23 times less return on investment than Alger Capital. But when comparing it to its historical volatility, Allianzgi Nfj Small Cap is 1.76 times less risky than Alger Capital. It trades about 0.08 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  4,303  in Alger Capital Appreciation on September 16, 2024 and sell it today you would earn a total of  232.00  from holding Alger Capital Appreciation or generate 5.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Allianzgi Nfj Small Cap  vs.  Alger Capital Appreciation

Allianzgi Nfj Small

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Nfj Small Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Allianzgi Nfj is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alger Capital Apprec

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Capital Appreciation are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Alger Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Allianzgi Nfj and Alger Capital

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

The idea behind Allianzgi Nfj Small Cap and Alger Capital Appreciation 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.