Correlation Between Neiman Large and Alger Smidcap

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

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

Diversification Opportunities for Neiman Large and Alger Smidcap

0.41

Correlation Coefficient

Neiman Large  Alger Smidcap

Very weak diversification

The 3 months correlation between Neiman and Alger is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Neiman Large Cap and Alger Smidcap Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Smidcap Focus and Neiman Large 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 Neiman Large Cap are associated (or correlated) with Alger Smidcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Smidcap Focus has no effect on the direction of Neiman Large i.e., Neiman Large and Alger Smidcap go up and down completely randomly.

Pair Corralation between Neiman Large and Alger Smidcap

Assuming the 90 days horizon Neiman Large Cap is expected to generate 0.51 times more return on investment than Alger Smidcap. However, Neiman Large Cap is 1.96 times less risky than Alger Smidcap. It trades about 0.0 of its potential returns per unit of risk. Alger Smidcap Focus is currently generating about -0.15 per unit of risk. If you would invest  3,141  in Neiman Large Cap on December 20, 2024 and sell it today you would lose (12.00) from holding Neiman Large Cap or give up 0.38% of portfolio value over 90 days.

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

Neiman Large Cap  vs.  Alger Smidcap Focus

Neiman Large Cap

Risk-Adjusted Performance

Very Weak

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

Alger Smidcap Focus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alger Smidcap Focus has generated negative risk-adjusted returns adding no value to fund investors. In spite of unfluctuating performance in the last few months, the Fund's basic 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.

Pair Trading with Neiman Large and Alger Smidcap

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

The idea behind Neiman Large Cap and Alger Smidcap Focus 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.