Correlation Between Alger Smidcap and Alger International
Can any of the company-specific risk be diversified away by investing in both Alger Smidcap and Alger 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 Smidcap and Alger International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Smidcap Focus and Alger International Growth, you can compare the effects of market volatilities on Alger Smidcap and Alger 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 Smidcap with a short position of Alger International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Smidcap and Alger International.
Diversification Opportunities for Alger Smidcap and Alger International
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alger and Alger is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Alger Smidcap Focus and Alger International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger International and Alger Smidcap 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 Smidcap Focus are associated (or correlated) with Alger International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger International has no effect on the direction of Alger Smidcap i.e., Alger Smidcap and Alger International go up and down completely randomly.
Pair Corralation between Alger Smidcap and Alger International
Assuming the 90 days horizon Alger Smidcap Focus is expected to under-perform the Alger International. In addition to that, Alger Smidcap is 1.28 times more volatile than Alger International Growth. It trades about -0.16 of its total potential returns per unit of risk. Alger International Growth is currently generating about -0.04 per unit of volatility. If you would invest 2,079 in Alger International Growth on December 2, 2024 and sell it today you would lose (67.00) from holding Alger International Growth or give up 3.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Alger Smidcap Focus vs. Alger International Growth
Performance |
Timeline |
Alger Smidcap Focus |
Alger International |
Alger Smidcap and Alger International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alger Smidcap and Alger International
The main advantage of trading using opposite Alger Smidcap and Alger International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Smidcap position performs unexpectedly, Alger 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 Alger International will offset losses from the drop in Alger International's long position.Alger Smidcap vs. Transamerica Emerging Markets | Alger Smidcap vs. Investec Emerging Markets | Alger Smidcap vs. Eagle Mlp Strategy | Alger Smidcap vs. Commodities Strategy Fund |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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