Correlation Between Inverse Emerging and Alger Global

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

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

Diversification Opportunities for Inverse Emerging and Alger Global

-0.5

Correlation Coefficient

Inverse Emerging  Alger Global

Very good diversification

The 3 months correlation between Inverse and Alger is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Emerging Markets 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 Inverse 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 Inverse Emerging Markets 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 Inverse Emerging i.e., Inverse Emerging and Alger Global go up and down completely randomly.

Pair Corralation between Inverse Emerging and Alger Global

Assuming the 90 days horizon Inverse Emerging Markets is expected to under-perform the Alger Global. In addition to that, Inverse Emerging is 2.67 times more volatile than Alger Global Growth. It trades about -0.07 of its total potential returns per unit of risk. Alger Global Growth is currently generating about 0.09 per unit of volatility. If you would invest  2,843  in Alger Global Growth on October 25, 2024 and sell it today you would earn a total of  34.00  from holding Alger Global Growth or generate 1.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Inverse Emerging Markets  vs.  Alger Global Growth

Inverse Emerging Markets

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inverse Emerging Markets are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Inverse Emerging may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 Inverse Emerging and Alger Global

The main advantage of trading using opposite Inverse Emerging and Alger Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Emerging 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 Inverse Emerging Markets 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.