Correlation Between Alger International and Absolute Convertible
Can any of the company-specific risk be diversified away by investing in both Alger International and Absolute Convertible 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 International and Absolute Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger International Growth and Absolute Convertible Arbitrage, you can compare the effects of market volatilities on Alger International and Absolute Convertible 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 International with a short position of Absolute Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger International and Absolute Convertible.
Diversification Opportunities for Alger International and Absolute Convertible
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alger and Absolute is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Alger International Growth and Absolute Convertible Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Convertible and Alger International 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 International Growth are associated (or correlated) with Absolute Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Convertible has no effect on the direction of Alger International i.e., Alger International and Absolute Convertible go up and down completely randomly.
Pair Corralation between Alger International and Absolute Convertible
Assuming the 90 days horizon Alger International Growth is expected to generate 15.59 times more return on investment than Absolute Convertible. However, Alger International is 15.59 times more volatile than Absolute Convertible Arbitrage. It trades about 0.07 of its potential returns per unit of risk. Absolute Convertible Arbitrage is currently generating about 0.56 per unit of risk. If you would invest 1,508 in Alger International Growth on September 4, 2024 and sell it today you would earn a total of 221.00 from holding Alger International Growth or generate 14.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger International Growth vs. Absolute Convertible Arbitrage
Performance |
| Timeline |
| Alger International |
| Absolute Convertible |
Alger International and Absolute Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger International and Absolute Convertible
The main advantage of trading using opposite Alger International and Absolute Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger International position performs unexpectedly, Absolute Convertible 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 Absolute Convertible will offset losses from the drop in Absolute Convertible's long position.| Alger International vs. Pace High Yield | Alger International vs. Siit High Yield | Alger International vs. T Rowe Price | Alger International vs. Ab Global Risk |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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