Correlation Between Alger Midcap and Veea

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

By analyzing existing cross correlation between Alger Midcap Growth and Veea Inc, you can compare the effects of market volatilities on Alger Midcap and Veea 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 Midcap with a short position of Veea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Midcap and Veea.

Diversification Opportunities for Alger Midcap and Veea

0.57

Correlation Coefficient

Alger Midcap  Veea

Very weak diversification

The 3 months correlation between Alger and Veea is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alger Midcap Growth and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc and Alger Midcap 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 Midcap Growth are associated (or correlated) with Veea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veea Inc has no effect on the direction of Alger Midcap i.e., Alger Midcap and Veea go up and down completely randomly.

Pair Corralation between Alger Midcap and Veea

Assuming the 90 days horizon Alger Midcap Growth is expected to generate 0.33 times more return on investment than Veea. However, Alger Midcap Growth is 3.07 times less risky than Veea. It trades about -0.06 of its potential returns per unit of risk. Veea Inc is currently generating about -0.21 per unit of risk. If you would invest  1,563  in Alger Midcap Growth on December 27, 2024 and sell it today you would lose (113.00) from holding Alger Midcap Growth or give up 7.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Alger Midcap Growth  vs.  Veea Inc

Alger Midcap Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alger Midcap Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Veea Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Veea Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Alger Midcap and Veea

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

The idea behind Alger Midcap Growth and Veea Inc 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.