Correlation Between Alger Capital and Ab Small
Can any of the company-specific risk be diversified away by investing in both Alger Capital and Ab Small 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 Ab Small 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 Ab Small Cap, you can compare the effects of market volatilities on Alger Capital and Ab Small 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 Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Capital and Ab Small.
Diversification Opportunities for Alger Capital and Ab Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alger and QUAIX is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Alger Capital Appreciation and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Alger Capital i.e., Alger Capital and Ab Small go up and down completely randomly.
Pair Corralation between Alger Capital and Ab Small
Assuming the 90 days horizon Alger Capital Appreciation is expected to generate 0.76 times more return on investment than Ab Small. However, Alger Capital Appreciation is 1.31 times less risky than Ab Small. It trades about 0.39 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.27 per unit of risk. If you would invest 3,730 in Alger Capital Appreciation on September 3, 2024 and sell it today you would earn a total of 368.00 from holding Alger Capital Appreciation or generate 9.87% 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. Ab Small Cap
Performance |
| Timeline |
| Alger Capital Apprec |
| Ab Small Cap |
Alger Capital and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Capital and Ab Small
The main advantage of trading using opposite Alger Capital and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Capital position performs unexpectedly, Ab Small 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 Ab Small will offset losses from the drop in Ab Small'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 Dynamic Opportunities |
| Ab Small vs. Principal Lifetime Hybrid | Ab Small vs. Semiconductor Ultrasector Profund | Ab Small vs. Issachar Fund Class | Ab Small vs. Federated Mdt Large |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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