Correlation Between Alger Mid and Multi Strategy
Can any of the company-specific risk be diversified away by investing in both Alger Mid and Multi Strategy 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 Mid and Multi Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Mid Cap and The Multi Strategy Growth, you can compare the effects of market volatilities on Alger Mid and Multi Strategy 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 Mid with a short position of Multi Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Mid and Multi Strategy.
Diversification Opportunities for Alger Mid and Multi Strategy
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alger and Multi is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Alger Mid Cap and The Multi Strategy Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Strategy and Alger Mid 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 Mid Cap are associated (or correlated) with Multi Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Strategy has no effect on the direction of Alger Mid i.e., Alger Mid and Multi Strategy go up and down completely randomly.
Pair Corralation between Alger Mid and Multi Strategy
Assuming the 90 days horizon Alger Mid Cap is expected to generate 3.04 times more return on investment than Multi Strategy. However, Alger Mid is 3.04 times more volatile than The Multi Strategy Growth. It trades about -0.04 of its potential returns per unit of risk. The Multi Strategy Growth is currently generating about -0.42 per unit of risk. 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 | Strong |
Accuracy | 95.45% |
Values | Daily Returns |
Alger Mid Cap vs. The Multi Strategy Growth
Performance |
Timeline |
Alger Mid Cap |
Multi Strategy |
Alger Mid and Multi Strategy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alger Mid and Multi Strategy
The main advantage of trading using opposite Alger Mid and Multi Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Mid position performs unexpectedly, Multi Strategy 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 Multi Strategy will offset losses from the drop in Multi Strategy's long position.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 |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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