Correlation Between Rbc Emerging and Alger Funds

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

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

Diversification Opportunities for Rbc Emerging and Alger Funds

-0.68

Correlation Coefficient

Rbc Emerging  Alger Funds

Excellent diversification

The 3 months correlation between Rbc and Alger is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Rbc Emerging Markets and Alger Funds Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Funds Mid and Rbc Emerging 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 Rbc Emerging Markets are associated (or correlated) with Alger Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Funds Mid has no effect on the direction of Rbc Emerging i.e., Rbc Emerging and Alger Funds go up and down completely randomly.

Pair Corralation between Rbc Emerging and Alger Funds

Assuming the 90 days horizon Rbc Emerging Markets is expected to under-perform the Alger Funds. But the mutual fund apears to be less risky and, when comparing its historical volatility, Rbc Emerging Markets is 1.28 times less risky than Alger Funds. The mutual fund trades about -0.25 of its potential returns per unit of risk. The Alger Funds Mid is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,639  in Alger Funds Mid on October 5, 2024 and sell it today you would earn a total of  232.00  from holding Alger Funds Mid or generate 14.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Rbc Emerging Markets  vs.  Alger Funds Mid

Rbc Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbc Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Alger Funds Mid

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Funds Mid are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Alger Funds showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rbc Emerging and Alger Funds

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

The idea behind Rbc Emerging Markets and Alger Funds Mid 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.