Correlation Between Alger Funds and 655844CQ9

Can any of the company-specific risk be diversified away by investing in both Alger Funds and 655844CQ9 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 655844CQ9 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 NSC 445 01 MAR 33, you can compare the effects of market volatilities on Alger Funds and 655844CQ9 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 655844CQ9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Funds and 655844CQ9.

Diversification Opportunities for Alger Funds and 655844CQ9

-0.73

Correlation Coefficient

Alger Funds  655844CQ9

Pay attention - limited upside

The 3 months correlation between Alger and 655844CQ9 is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Alger Funds Mid and NSC 445 01 MAR 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSC 445 01 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 655844CQ9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSC 445 01 has no effect on the direction of Alger Funds i.e., Alger Funds and 655844CQ9 go up and down completely randomly.

Pair Corralation between Alger Funds and 655844CQ9

Assuming the 90 days horizon Alger Funds Mid is expected to generate 1.7 times more return on investment than 655844CQ9. However, Alger Funds is 1.7 times more volatile than NSC 445 01 MAR 33. It trades about -0.07 of its potential returns per unit of risk. NSC 445 01 MAR 33 is currently generating about -0.16 per unit of risk. If you would invest  1,913  in Alger Funds Mid on September 24, 2024 and sell it today you would lose (50.00) from holding Alger Funds Mid or give up 2.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	70.0%
Values	Daily Returns

Alger Funds Mid  vs.  NSC 445 01 MAR 33

Alger Funds Mid

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Funds Mid are ranked lower than 12 (%) 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.

NSC 445 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NSC 445 01 MAR 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NSC 445 01 MAR 33 investors.

Pair Trading with Alger Funds and 655844CQ9

The main advantage of trading using opposite Alger Funds and 655844CQ9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Funds position performs unexpectedly, 655844CQ9 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 655844CQ9 will offset losses from the drop in 655844CQ9's long position.

The idea behind Alger Funds Mid and NSC 445 01 MAR 33 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.