Correlation Between Global Gold and Alger Midcap
Can any of the company-specific risk be diversified away by investing in both Global Gold and Alger Midcap 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 Global Gold and Alger Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Alger Midcap Growth, you can compare the effects of market volatilities on Global Gold and Alger Midcap 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 Global Gold with a short position of Alger Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Alger Midcap.
Diversification Opportunities for Global Gold and Alger Midcap
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Alger is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Alger Midcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Midcap Growth and Global Gold 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 Global Gold Fund are associated (or correlated) with Alger Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Midcap Growth has no effect on the direction of Global Gold i.e., Global Gold and Alger Midcap go up and down completely randomly.
Pair Corralation between Global Gold and Alger Midcap
Assuming the 90 days horizon Global Gold is expected to generate 4.06 times less return on investment than Alger Midcap. In addition to that, Global Gold is 1.76 times more volatile than Alger Midcap Growth. It trades about 0.04 of its total potential returns per unit of risk. Alger Midcap Growth is currently generating about 0.26 per unit of volatility. If you would invest 799.00 in Alger Midcap Growth on September 12, 2024 and sell it today you would earn a total of 148.00 from holding Alger Midcap Growth or generate 18.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Alger Midcap Growth
Performance |
| Timeline |
| Global Gold Fund |
| Alger Midcap Growth |
Global Gold and Alger Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Alger Midcap
The main advantage of trading using opposite Global Gold and Alger Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Alger Midcap 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 Midcap will offset losses from the drop in Alger Midcap's long position.| Global Gold vs. Sa Worldwide Moderate | Global Gold vs. Putnman Retirement Ready | Global Gold vs. Pro Blend Moderate Term | Global Gold vs. Franklin Lifesmart Retirement |
| Alger Midcap vs. Federated Hermes Conservative | Alger Midcap vs. Elfun Diversified Fund | Alger Midcap vs. Stone Ridge Diversified | Alger Midcap vs. Blackrock Conservative Prprdptfinstttnl |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |