Correlation Between Alger Emerging and Lgm Risk
Can any of the company-specific risk be diversified away by investing in both Alger Emerging and Lgm Risk 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 Emerging and Lgm Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Emerging Markets and Lgm Risk Managed, you can compare the effects of market volatilities on Alger Emerging and Lgm Risk 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 Emerging with a short position of Lgm Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Emerging and Lgm Risk.
Diversification Opportunities for Alger Emerging and Lgm Risk
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alger and Lgm is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alger Emerging Markets and Lgm Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lgm Risk Managed and Alger 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 Alger Emerging Markets are associated (or correlated) with Lgm Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lgm Risk Managed has no effect on the direction of Alger Emerging i.e., Alger Emerging and Lgm Risk go up and down completely randomly.
Pair Corralation between Alger Emerging and Lgm Risk
Assuming the 90 days horizon Alger Emerging is expected to generate 4.14 times less return on investment than Lgm Risk. In addition to that, Alger Emerging is 2.44 times more volatile than Lgm Risk Managed. It trades about 0.01 of its total potential returns per unit of risk. Lgm Risk Managed is currently generating about 0.13 per unit of volatility. If you would invest 1,080 in Lgm Risk Managed on September 1, 2024 and sell it today you would earn a total of 71.00 from holding Lgm Risk Managed or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Alger Emerging Markets vs. Lgm Risk Managed
Performance |
| Timeline |
| Alger Emerging Markets |
| Lgm Risk Managed |
Alger Emerging and Lgm Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Emerging and Lgm Risk
The main advantage of trading using opposite Alger Emerging and Lgm Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Emerging position performs unexpectedly, Lgm Risk 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 Lgm Risk will offset losses from the drop in Lgm Risk's long position.| Alger Emerging vs. Blackrock Health Sciences | Alger Emerging vs. Allianzgi Health Sciences | Alger Emerging vs. Baron Health Care | Alger Emerging vs. Delaware Healthcare Fund |
| Lgm Risk vs. American Balanced Fund | Lgm Risk vs. Westwood Largecap Value | Lgm Risk vs. Brookfield Real Assets | Lgm Risk vs. Fidelity Balanced Fund |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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