Correlation Between Alger Midcap and Eic Value
Can any of the company-specific risk be diversified away by investing in both Alger Midcap and Eic Value 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 Midcap and Eic Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Midcap Growth and Eic Value Fund, you can compare the effects of market volatilities on Alger Midcap and Eic Value 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 Midcap with a short position of Eic Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Midcap and Eic Value.
Diversification Opportunities for Alger Midcap and Eic Value
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alger and Eic is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Alger Midcap Growth and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and Alger Midcap 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 Midcap Growth are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Alger Midcap i.e., Alger Midcap and Eic Value go up and down completely randomly.
Pair Corralation between Alger Midcap and Eic Value
Assuming the 90 days horizon Alger Midcap Growth is expected to generate 2.3 times more return on investment than Eic Value. However, Alger Midcap is 2.3 times more volatile than Eic Value Fund. It trades about 0.1 of its potential returns per unit of risk. Eic Value Fund is currently generating about -0.03 per unit of risk. If you would invest 920.00 in Alger Midcap Growth on September 14, 2024 and sell it today you would earn a total of 22.00 from holding Alger Midcap Growth or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Midcap Growth vs. Eic Value Fund
Performance |
| Timeline |
| Alger Midcap Growth |
| Eic Value Fund |
Alger Midcap and Eic Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Midcap and Eic Value
The main advantage of trading using opposite Alger Midcap and Eic Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Midcap position performs unexpectedly, Eic Value 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 Eic Value will offset losses from the drop in Eic Value's long position.| Alger Midcap vs. Alger Midcap Growth | Alger Midcap vs. Alger Mid Cap | Alger Midcap vs. Alger Small Cap | Alger Midcap vs. Alger Small Cap |
| Eic Value vs. Eic Value Fund | Eic Value vs. T Rowe Price | Eic Value vs. Davidson Multi Cap Equity | Eic Value vs. Equity Income 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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