Correlation Between Alger Capital and Select Fund
Can any of the company-specific risk be diversified away by investing in both Alger Capital and Select 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 Select 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 Select Fund R, you can compare the effects of market volatilities on Alger Capital and Select 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 Select Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Capital and Select Fund.
Diversification Opportunities for Alger Capital and Select Fund
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alger and Select is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Alger Capital Appreciation and Select Fund R in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Fund R 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 Select Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Fund R has no effect on the direction of Alger Capital i.e., Alger Capital and Select Fund go up and down completely randomly.
Pair Corralation between Alger Capital and Select Fund
Assuming the 90 days horizon Alger Capital Appreciation is expected to generate 1.17 times more return on investment than Select Fund. However, Alger Capital is 1.17 times more volatile than Select Fund R. It trades about 0.27 of its potential returns per unit of risk. Select Fund R is currently generating about 0.06 per unit of risk. If you would invest 7,630 in Alger Capital Appreciation on August 26, 2024 and sell it today you would earn a total of 601.00 from holding Alger Capital Appreciation or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Capital Appreciation vs. Select Fund R
Performance |
| Timeline |
| Alger Capital Apprec |
| Select Fund R |
Alger Capital and Select Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Capital and Select Fund
The main advantage of trading using opposite Alger Capital and Select Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Capital position performs unexpectedly, Select 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 Select Fund will offset losses from the drop in Select Fund's long position.| Alger Capital vs. Alger Small Cap | Alger Capital vs. Alger Smidcap Focus | Alger Capital vs. Alger Capital Appreciation | Alger Capital vs. Alger Capital Appreciation |
| Select Fund vs. Select Fund C | Select Fund vs. Ultra Fund C | Select Fund vs. Ultra Fund R6 | Select Fund vs. Nasdaq 100 Fund Class |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |