Correlation Between Alger Mid and Gabelli ETFs

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

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

Diversification Opportunities for Alger Mid and Gabelli ETFs

0.94

Correlation Coefficient

Alger Mid  Gabelli ETFs

Almost no diversification

The 3 months correlation between Alger and Gabelli is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Alger Mid Cap and Gabelli ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli ETFs Trust and Alger Mid 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 Mid Cap are associated (or correlated) with Gabelli ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli ETFs Trust has no effect on the direction of Alger Mid i.e., Alger Mid and Gabelli ETFs go up and down completely randomly.

Pair Corralation between Alger Mid and Gabelli ETFs

Given the investment horizon of 90 days Alger Mid Cap is expected to generate 1.46 times more return on investment than Gabelli ETFs. However, Alger Mid is 1.46 times more volatile than Gabelli ETFs Trust. It trades about 0.11 of its potential returns per unit of risk. Gabelli ETFs Trust is currently generating about 0.09 per unit of risk. If you would invest  1,739  in Alger Mid Cap on October 10, 2024 and sell it today you would earn a total of  180.00  from holding Alger Mid Cap or generate 10.35% return on investment over 90 days.

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

Alger Mid Cap  vs.  Gabelli ETFs Trust

Alger Mid Cap

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Mid Cap are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Alger Mid may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Gabelli ETFs Trust

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli ETFs Trust are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Gabelli ETFs is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Alger Mid and Gabelli ETFs

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

The idea behind Alger Mid Cap and Gabelli ETFs 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.