Correlation Between Alger Emerging and Alger International
Can any of the company-specific risk be diversified away by investing in both Alger Emerging and Alger 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 Emerging and Alger International 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 Alger International Growth, you can compare the effects of market volatilities on Alger Emerging and Alger 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 Emerging with a short position of Alger International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Emerging and Alger International.
Diversification Opportunities for Alger Emerging and Alger International
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alger and Alger is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alger Emerging Markets and Alger International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger International 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 Alger International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger International has no effect on the direction of Alger Emerging i.e., Alger Emerging and Alger International go up and down completely randomly.
Pair Corralation between Alger Emerging and Alger International
Assuming the 90 days horizon Alger Emerging Markets is expected to generate 1.01 times more return on investment than Alger International. However, Alger Emerging is 1.01 times more volatile than Alger International Growth. It trades about 0.06 of its potential returns per unit of risk. Alger International Growth is currently generating about 0.05 per unit of risk. If you would invest 819.00 in Alger Emerging Markets on August 31, 2024 and sell it today you would earn a total of 182.00 from holding Alger Emerging Markets or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Emerging Markets vs. Alger International Growth
Performance |
| Timeline |
| Alger Emerging Markets |
| Alger International |
Alger Emerging and Alger International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Emerging and Alger International
The main advantage of trading using opposite Alger Emerging and Alger International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Emerging position performs unexpectedly, Alger 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 Alger International will offset losses from the drop in Alger International's long position.| Alger Emerging vs. Aqr Risk Balanced Modities | Alger Emerging vs. T Rowe Price | Alger Emerging vs. Legg Mason Partners | Alger Emerging vs. Ab Global Risk |
| Alger International vs. Artisan Emerging Markets | Alger International vs. Siit Emerging Markets | Alger International vs. Rbc Emerging Markets | Alger International vs. Goldman Sachs Emerging |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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