Correlation Between Alger Capital and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both Alger Capital and Europacific Growth 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 Europacific Growth 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 Europacific Growth Fund, you can compare the effects of market volatilities on Alger Capital and Europacific Growth 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 Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Capital and Europacific Growth.
Diversification Opportunities for Alger Capital and Europacific Growth
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alger and Europacific is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Alger Capital Appreciation and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth 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 Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Alger Capital i.e., Alger Capital and Europacific Growth go up and down completely randomly.
Pair Corralation between Alger Capital and Europacific Growth
Assuming the 90 days horizon Alger Capital Appreciation is expected to generate 1.48 times more return on investment than Europacific Growth. However, Alger Capital is 1.48 times more volatile than Europacific Growth Fund. It trades about 0.12 of its potential returns per unit of risk. Europacific Growth Fund is currently generating about 0.04 per unit of risk. If you would invest 5,716 in Alger Capital Appreciation on November 29, 2024 and sell it today you would earn a total of 5,447 from holding Alger Capital Appreciation or generate 95.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Capital Appreciation vs. Europacific Growth Fund
Performance |
| Timeline |
| Alger Capital Apprec |
| Europacific Growth |
Alger Capital and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Capital and Europacific Growth
The main advantage of trading using opposite Alger Capital and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Capital position performs unexpectedly, Europacific Growth 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 Europacific Growth will offset losses from the drop in Europacific Growth'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 |
| Europacific Growth vs. Growth Fund Of | Europacific Growth vs. Vanguard Institutional Index | Europacific Growth vs. Vanguard Mid Cap Index | Europacific Growth 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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