Correlation Between Alger Global and Rbc Funds

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

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

Diversification Opportunities for Alger Global and Rbc Funds

0.0

Correlation Coefficient

Alger Global  Rbc Funds

Pay attention - limited upside

The 3 months correlation between Alger and Rbc is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alger Global Growth and Rbc Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Funds Trust and Alger Global 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 Global Growth are associated (or correlated) with Rbc Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Funds Trust has no effect on the direction of Alger Global i.e., Alger Global and Rbc Funds go up and down completely randomly.

Pair Corralation between Alger Global and Rbc Funds

Assuming the 90 days horizon Alger Global Growth is expected to generate 9.13 times more return on investment than Rbc Funds. However, Alger Global is 9.13 times more volatile than Rbc Funds Trust. It trades about 0.03 of its potential returns per unit of risk. Rbc Funds Trust is currently generating about 0.13 per unit of risk. If you would invest  2,081  in Alger Global Growth on December 2, 2024 and sell it today you would earn a total of  353.00  from holding Alger Global Growth or generate 16.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.8%
Values	Daily Returns

Alger Global Growth  vs.  Rbc Funds Trust

Alger Global Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alger Global Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly 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 fund investors.

Rbc Funds Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rbc Funds Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Rbc Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alger Global and Rbc Funds

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

The idea behind Alger Global Growth and Rbc Funds Trust 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.