Correlation Between Alger Capital and Thornburg International
Can any of the company-specific risk be diversified away by investing in both Alger Capital and Thornburg International 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 Thornburg International 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 Thornburg International Value, you can compare the effects of market volatilities on Alger Capital and Thornburg International 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 Thornburg International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Capital and Thornburg International.
Diversification Opportunities for Alger Capital and Thornburg International
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alger and Thornburg is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Alger Capital Appreciation and Thornburg International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg International 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 Thornburg International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg International has no effect on the direction of Alger Capital i.e., Alger Capital and Thornburg International go up and down completely randomly.
Pair Corralation between Alger Capital and Thornburg International
Assuming the 90 days horizon Alger Capital is expected to generate 4.97 times less return on investment than Thornburg International. In addition to that, Alger Capital is 1.93 times more volatile than Thornburg International Value. It trades about 0.02 of its total potential returns per unit of risk. Thornburg International Value is currently generating about 0.18 per unit of volatility. If you would invest 2,610 in Thornburg International Value on November 27, 2024 and sell it today you would earn a total of 69.00 from holding Thornburg International Value or generate 2.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Capital Appreciation vs. Thornburg International Value
Performance |
| Timeline |
| Alger Capital Apprec |
| Thornburg International |
Alger Capital and Thornburg International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Capital and Thornburg International
The main advantage of trading using opposite Alger Capital and Thornburg International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Capital position performs unexpectedly, Thornburg International 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 Thornburg International will offset losses from the drop in Thornburg International's long position.| Alger Capital vs. Metropolitan West Ultra | Alger Capital vs. Old Westbury Short Term | Alger Capital vs. Transamerica Short Term Bond | Alger Capital vs. Alpine Ultra Short |
| Thornburg International vs. Total Return Fund | Thornburg International vs. Blackrock Gbl Alloc | Thornburg International vs. Blackrock Eq Dividend | Thornburg International vs. Davis New York |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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