Correlation Between Alger Capital and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Alger Capital and Emerging Markets 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 Emerging Markets 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 Emerging Markets Portfolio, you can compare the effects of market volatilities on Alger Capital and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Capital and Emerging Markets.
Diversification Opportunities for Alger Capital and Emerging Markets
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alger and Emerging is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Alger Capital Appreciation and Emerging Markets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Por 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Por has no effect on the direction of Alger Capital i.e., Alger Capital and Emerging Markets go up and down completely randomly.
Pair Corralation between Alger Capital and Emerging Markets
Assuming the 90 days horizon Alger Capital Appreciation is expected to generate 1.46 times more return on investment than Emerging Markets. However, Alger Capital is 1.46 times more volatile than Emerging Markets Portfolio. It trades about 0.1 of its potential returns per unit of risk. Emerging Markets Portfolio is currently generating about 0.04 per unit of risk. If you would invest 2,698 in Alger Capital Appreciation on August 30, 2024 and sell it today you would earn a total of 2,205 from holding Alger Capital Appreciation or generate 81.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Capital Appreciation vs. Emerging Markets Portfolio
Performance |
| Timeline |
| Alger Capital Apprec |
| Emerging Markets Por |
Alger Capital and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Capital and Emerging Markets
The main advantage of trading using opposite Alger Capital and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Capital position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Alger Capital vs. Growth Fund Of | Alger Capital vs. HUMANA INC | Alger Capital vs. Aquagold International | Alger Capital vs. Barloworld Ltd ADR |
| Emerging Markets vs. Mfs Technology Fund | Emerging Markets vs. Allianzgi Technology Fund | Emerging Markets vs. Firsthand Technology Opportunities | Emerging Markets vs. Hennessy Technology Fund |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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