Correlation Between Global Gold and Alger Small
Can any of the company-specific risk be diversified away by investing in both Global Gold and Alger 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 Global Gold and Alger Small 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 Small Cap, you can compare the effects of market volatilities on Global Gold and Alger 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 Global Gold with a short position of Alger Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Alger Small.
Diversification Opportunities for Global Gold and Alger Small
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Alger is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Alger Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Small Cap 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 Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Small Cap has no effect on the direction of Global Gold i.e., Global Gold and Alger Small go up and down completely randomly.
Pair Corralation between Global Gold and Alger Small
Assuming the 90 days horizon Global Gold Fund is expected to generate 1.27 times more return on investment than Alger Small. However, Global Gold is 1.27 times more volatile than Alger Small Cap. It trades about 0.07 of its potential returns per unit of risk. Alger Small Cap is currently generating about 0.08 per unit of risk. If you would invest 962.00 in Global Gold Fund on September 4, 2024 and sell it today you would earn a total of 324.00 from holding Global Gold Fund or generate 33.68% 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 Small Cap
Performance |
| Timeline |
| Global Gold Fund |
| Alger Small Cap |
Global Gold and Alger Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Alger Small
The main advantage of trading using opposite Global Gold and Alger Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Alger 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 Alger Small will offset losses from the drop in Alger Small's long position.| Global Gold vs. Oklahoma College Savings | Global Gold vs. Barings Emerging Markets | Global Gold vs. Artisan Emerging Markets | Global Gold vs. Transamerica Emerging Markets |
| Alger Small vs. Gamco Global Gold | Alger Small vs. Global Gold Fund | Alger Small vs. Sprott Gold Equity | Alger Small vs. Goldman Sachs Clean |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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