Correlation Between Dimensional International and Alger ETF

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

By analyzing existing cross correlation between Dimensional International High and The Alger ETF, you can compare the effects of market volatilities on Dimensional International and Alger ETF 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 Dimensional International with a short position of Alger ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional International and Alger ETF.

Diversification Opportunities for Dimensional International and Alger ETF

-0.5

Correlation Coefficient

Dimensional International  Alger ETF

Very good diversification

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

Pair Corralation between Dimensional International and Alger ETF

Given the investment horizon of 90 days Dimensional International High is expected to generate 0.35 times more return on investment than Alger ETF. However, Dimensional International High is 2.82 times less risky than Alger ETF. It trades about 0.16 of its potential returns per unit of risk. The Alger ETF is currently generating about -0.09 per unit of risk. If you would invest  2,515  in Dimensional International High on December 30, 2024 and sell it today you would earn a total of  197.00  from holding Dimensional International High or generate 7.83% return on investment over 90 days.

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

Dimensional International High  vs.  The Alger ETF

Dimensional International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional International High are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical indicators, Dimensional International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Alger ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Alger ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Etf's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with Dimensional International and Alger ETF

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

The idea behind Dimensional International High and The Alger ETF 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.