Correlation Between Alger Smallcap and Alger Funds
Can any of the company-specific risk be diversified away by investing in both Alger Smallcap and Alger Funds 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 Smallcap and Alger Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Smallcap Growth and Alger Funds Mid, you can compare the effects of market volatilities on Alger Smallcap and Alger Funds 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 Smallcap with a short position of Alger Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Smallcap and Alger Funds.
Diversification Opportunities for Alger Smallcap and Alger Funds
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alger and Alger is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Alger Smallcap Growth and Alger Funds Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Funds Mid and Alger Smallcap 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 Smallcap Growth are associated (or correlated) with Alger Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Funds Mid has no effect on the direction of Alger Smallcap i.e., Alger Smallcap and Alger Funds go up and down completely randomly.
Pair Corralation between Alger Smallcap and Alger Funds
Assuming the 90 days horizon Alger Smallcap is expected to generate 1.95 times less return on investment than Alger Funds. But when comparing it to its historical volatility, Alger Smallcap Growth is 1.03 times less risky than Alger Funds. It trades about 0.04 of its potential returns per unit of risk. Alger Funds Mid is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,156 in Alger Funds Mid on September 23, 2024 and sell it today you would earn a total of 707.00 from holding Alger Funds Mid or generate 61.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Alger Smallcap Growth vs. Alger Funds Mid
Performance |
Timeline |
Alger Smallcap Growth |
Alger Funds Mid |
Alger Smallcap and Alger Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alger Smallcap and Alger Funds
The main advantage of trading using opposite Alger Smallcap and Alger Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Smallcap position performs unexpectedly, Alger Funds 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 Funds will offset losses from the drop in Alger Funds' long position.Alger Smallcap vs. Alger Midcap Growth | Alger Smallcap vs. Alger Midcap Growth | Alger Smallcap vs. Alger Mid Cap | Alger Smallcap vs. Alger Small Cap |
Alger Funds vs. Alger Smallcap Growth | Alger Funds vs. Alger Capital Appreciation | Alger Funds vs. Janus Overseas Fund | Alger Funds vs. Allianzgi Nfj Small Cap |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |