Correlation Between Alger Funds and Alger Smidcap

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

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

Diversification Opportunities for Alger Funds and Alger Smidcap

0.0

Correlation Coefficient

Alger Funds  Alger Smidcap

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

Pair Corralation between Alger Funds and Alger Smidcap

If you would invest  1,573  in Alger Funds Mid on September 14, 2024 and sell it today you would earn a total of  346.00  from holding Alger Funds Mid or generate 22.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.79%
Values	Daily Returns

Alger Funds Mid  vs.  Alger Smidcap Focus

Alger Funds Mid

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Funds Mid are ranked lower than 21 (%) 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 Smidcap Focus

Risk-Adjusted Performance

0 of 100

OK

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 basic indicators, Alger Smidcap 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 Smidcap

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

The idea behind Alger Funds Mid and Alger Smidcap Focus 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.