Correlation Between Alger Concentrated and Franklin Convertible

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Can any of the company-specific risk be diversified away by investing in both Alger Concentrated and Franklin Convertible 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 Concentrated and Franklin Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Concentrated Equity and Franklin Vertible Securities, you can compare the effects of market volatilities on Alger Concentrated and Franklin Convertible 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 Concentrated with a short position of Franklin Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Concentrated and Franklin Convertible.

Diversification Opportunities for Alger Concentrated and Franklin Convertible

AlgerFranklinDiversified AwayAlgerFranklinDiversified Away100%
0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Alger and Franklin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Alger Concentrated Equity and Franklin Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Convertible and Alger Concentrated 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 Concentrated Equity are associated (or correlated) with Franklin Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Convertible has no effect on the direction of Alger Concentrated i.e., Alger Concentrated and Franklin Convertible go up and down completely randomly.

Pair Corralation between Alger Concentrated and Franklin Convertible

Assuming the 90 days horizon Alger Concentrated Equity is expected to generate 2.21 times more return on investment than Franklin Convertible. However, Alger Concentrated is 2.21 times more volatile than Franklin Vertible Securities. It trades about 0.11 of its potential returns per unit of risk. Franklin Vertible Securities is currently generating about 0.07 per unit of risk. If you would invest  1,220  in Alger Concentrated Equity on October 21, 2024 and sell it today you would earn a total of  111.00  from holding Alger Concentrated Equity or generate 9.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Alger Concentrated Equity  vs.  Franklin Vertible Securities

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 0510
JavaScript chart by amCharts 3.21.15CNEIX FCSKX
       Timeline  
Alger Concentrated Equity 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Alger Concentrated Equity are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Alger Concentrated may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1212.51313.5
Franklin Convertible 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Vertible Securities are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Franklin Convertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2323.52424.525

Alger Concentrated and Franklin Convertible Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.19-3.14-2.09-1.040.01751.12.223.344.46 0.20.40.60.81.01.2
JavaScript chart by amCharts 3.21.15CNEIX FCSKX
       Returns  

Pair Trading with Alger Concentrated and Franklin Convertible

The main advantage of trading using opposite Alger Concentrated and Franklin Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Concentrated position performs unexpectedly, Franklin Convertible 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 Franklin Convertible will offset losses from the drop in Franklin Convertible's long position.
The idea behind Alger Concentrated Equity and Franklin Vertible Securities 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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