Correlation Between Predex Funds and Alger Global

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

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

Diversification Opportunities for Predex Funds and Alger Global

0.0

Correlation Coefficient

Predex Funds  Alger Global

Pay attention - limited upside

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

Pair Corralation between Predex Funds and Alger Global

Assuming the 90 days horizon Predex Funds is expected to under-perform the Alger Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Predex Funds is 2.93 times less risky than Alger Global. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Alger Global Growth is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,332  in Alger Global Growth on October 9, 2024 and sell it today you would earn a total of  519.00  from holding Alger Global Growth or generate 22.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.39%
Values	Daily Returns

Predex Funds  vs.  Alger Global Growth

Predex Funds

Risk-Adjusted Performance

0 of 100

Very Weak

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

Alger Global Growth

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Predex Funds and Alger Global

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

The idea behind Predex Funds and Alger Global Growth 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.