Correlation Between Ab Value and Alger Midcap
Can any of the company-specific risk be diversified away by investing in both Ab Value and Alger Midcap 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 Ab Value and Alger Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Value Fund and Alger Midcap Growth, you can compare the effects of market volatilities on Ab Value and Alger Midcap 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 Ab Value with a short position of Alger Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Alger Midcap.
Diversification Opportunities for Ab Value and Alger Midcap
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ABVCX and Alger is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and Alger Midcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Midcap Growth and Ab Value 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 Ab Value Fund are associated (or correlated) with Alger Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Midcap Growth has no effect on the direction of Ab Value i.e., Ab Value and Alger Midcap go up and down completely randomly.
Pair Corralation between Ab Value and Alger Midcap
Assuming the 90 days horizon Ab Value is expected to generate 1.33 times less return on investment than Alger Midcap. But when comparing it to its historical volatility, Ab Value Fund is 1.48 times less risky than Alger Midcap. It trades about 0.11 of its potential returns per unit of risk. Alger Midcap Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 740.00 in Alger Midcap Growth on September 14, 2024 and sell it today you would earn a total of 202.00 from holding Alger Midcap Growth or generate 27.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Value Fund vs. Alger Midcap Growth
Performance |
| Timeline |
| Ab Value Fund |
| Alger Midcap Growth |
Ab Value and Alger Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Value and Alger Midcap
The main advantage of trading using opposite Ab Value and Alger Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Value position performs unexpectedly, Alger Midcap 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 Midcap will offset losses from the drop in Alger Midcap's long position.| Ab Value vs. Putnam Convertible Incm Gwth | Ab Value vs. Fidelity Sai Convertible | Ab Value vs. Calamos Dynamic Convertible | Ab Value vs. Advent Claymore Convertible |
| Alger Midcap vs. Alger Midcap Growth | Alger Midcap vs. Alger Mid Cap | Alger Midcap vs. Alger Small Cap | Alger Midcap vs. Alger Small Cap |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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