Correlation Between Alger Capital and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Alger Capital and Growth Fund 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 Growth Fund 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 Growth Fund Of, you can compare the effects of market volatilities on Alger Capital and Growth Fund 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 Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Capital and Growth Fund.
Diversification Opportunities for Alger Capital and Growth Fund
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alger and Growth is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Alger Capital Appreciation and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Alger Capital i.e., Alger Capital and Growth Fund go up and down completely randomly.
Pair Corralation between Alger Capital and Growth Fund
Assuming the 90 days horizon Alger Capital Appreciation is expected to generate 1.31 times more return on investment than Growth Fund. However, Alger Capital is 1.31 times more volatile than Growth Fund Of. It trades about 0.13 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.1 per unit of risk. If you would invest 5,933 in Alger Capital Appreciation on September 1, 2024 and sell it today you would earn a total of 2,008 from holding Alger Capital Appreciation or generate 33.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Alger Capital Appreciation vs. Growth Fund Of
Performance |
| Timeline |
| Alger Capital Apprec |
| Growth Fund |
Alger Capital and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Capital and Growth Fund
The main advantage of trading using opposite Alger Capital and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Capital position performs unexpectedly, Growth Fund 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 Growth Fund will offset losses from the drop in Growth Fund'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 Small Cap |
| Growth Fund vs. Europacific Growth Fund | Growth Fund vs. Capital World Growth | Growth Fund vs. American Funds Fundamental | Growth Fund vs. Washington Mutual Investors |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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