Correlation Between Alger Spectra and American Funds

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Alger Spectra and American 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 Spectra and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Spectra Fund and American Funds The, you can compare the effects of market volatilities on Alger Spectra and American 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 Spectra with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Spectra and American Funds.

Diversification Opportunities for Alger Spectra and American Funds

AlgerAmericanDiversified AwayAlgerAmericanDiversified Away100%
0.98
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Alger and American is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Alger Spectra Fund and American Funds The in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds and Alger Spectra 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 Spectra Fund are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds has no effect on the direction of Alger Spectra i.e., Alger Spectra and American Funds go up and down completely randomly.

Pair Corralation between Alger Spectra and American Funds

Assuming the 90 days horizon Alger Spectra Fund is expected to generate 1.74 times more return on investment than American Funds. However, Alger Spectra is 1.74 times more volatile than American Funds The. It trades about 0.13 of its potential returns per unit of risk. American Funds The is currently generating about 0.23 per unit of risk. If you would invest  2,679  in Alger Spectra Fund on September 14, 2024 and sell it today you would earn a total of  324.00  from holding Alger Spectra Fund or generate 12.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy98.44%
ValuesDaily Returns

Alger Spectra Fund  vs.  American Funds The

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 510152025
JavaScript chart by amCharts 3.21.15ASPIX FAFGX
       Timeline  
Alger Spectra 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Alger Spectra Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Alger Spectra may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2829303132
American Funds 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in American Funds The are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, American Funds may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec767778798081828384

Alger Spectra and American Funds Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.39-2.54-1.69-0.840.01420.991.982.973.96 0.10.20.30.40.50.6
JavaScript chart by amCharts 3.21.15ASPIX FAFGX
       Returns  

Pair Trading with Alger Spectra and American Funds

The main advantage of trading using opposite Alger Spectra and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Spectra position performs unexpectedly, American 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 American Funds will offset losses from the drop in American Funds' long position.
The idea behind Alger Spectra Fund and American Funds The 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.
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

Other Complementary Tools

Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like