Correlation Between Alger Midcap and Aristotle International

Can any of the company-specific risk be diversified away by investing in both Alger Midcap and Aristotle International 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 Aristotle International 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 Aristotle International Eq, you can compare the effects of market volatilities on Alger Midcap and Aristotle International 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 Aristotle International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Midcap and Aristotle International.

Diversification Opportunities for Alger Midcap and Aristotle International

-0.49

Correlation Coefficient

Alger Midcap  Aristotle International

Very good diversification

The 3 months correlation between Alger and Aristotle is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Alger Midcap Growth and Aristotle International Eq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle International 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 Aristotle International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle International has no effect on the direction of Alger Midcap i.e., Alger Midcap and Aristotle International go up and down completely randomly.

Pair Corralation between Alger Midcap and Aristotle International

Assuming the 90 days horizon Alger Midcap Growth is expected to generate 1.72 times more return on investment than Aristotle International. However, Alger Midcap is 1.72 times more volatile than Aristotle International Eq. It trades about 0.1 of its potential returns per unit of risk. Aristotle International Eq is currently generating about -0.2 per unit of risk. If you would invest  839.00  in Alger Midcap Growth on September 30, 2024 and sell it today you would earn a total of  61.00  from holding Alger Midcap Growth or generate 7.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Alger Midcap Growth  vs.  Aristotle International Eq

Alger Midcap Growth

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Midcap Growth are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Alger Midcap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aristotle International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Alger Midcap and Aristotle International

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

The idea behind Alger Midcap Growth and Aristotle International Eq 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.