Correlation Between Alger Capital and Alger Smallcap
Can any of the company-specific risk be diversified away by investing in both Alger Capital and Alger Smallcap 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 Capital and Alger Smallcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Capital Appreciation and Alger Smallcap Growth, you can compare the effects of market volatilities on Alger Capital and Alger Smallcap 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 Capital with a short position of Alger Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Capital and Alger Smallcap.
Diversification Opportunities for Alger Capital and Alger Smallcap
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alger and Alger is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Alger Capital Appreciation and Alger Smallcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Smallcap Growth and Alger Capital 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 Capital Appreciation are associated (or correlated) with Alger Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Smallcap Growth has no effect on the direction of Alger Capital i.e., Alger Capital and Alger Smallcap go up and down completely randomly.
Pair Corralation between Alger Capital and Alger Smallcap
Assuming the 90 days horizon Alger Capital Appreciation is expected to generate 1.06 times more return on investment than Alger Smallcap. However, Alger Capital is 1.06 times more volatile than Alger Smallcap Growth. It trades about 0.13 of its potential returns per unit of risk. Alger Smallcap Growth is currently generating about 0.09 per unit of risk. If you would invest 3,078 in Alger Capital Appreciation on September 1, 2024 and sell it today you would earn a total of 701.00 from holding Alger Capital Appreciation or generate 22.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Capital Appreciation vs. Alger Smallcap Growth
Performance |
| Timeline |
| Alger Capital Apprec |
| Alger Smallcap Growth |
Alger Capital and Alger Smallcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Capital and Alger Smallcap
The main advantage of trading using opposite Alger Capital and Alger Smallcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Capital position performs unexpectedly, Alger Smallcap 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 Smallcap will offset losses from the drop in Alger Smallcap's long position.| Alger Capital vs. Alger Midcap Growth | Alger Capital vs. Alger Midcap Growth | Alger Capital vs. Alger Mid Cap | Alger Capital vs. Alger Small Cap |
| Alger Smallcap vs. Alger Midcap Growth | Alger Smallcap vs. Alger Midcap Growth | Alger Smallcap vs. Alger Mid Cap | Alger Smallcap 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |