Correlation Between Alger Midcap and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Alger Midcap and Federated Hermes 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 Federated Hermes 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 Federated Hermes Conservative, you can compare the effects of market volatilities on Alger Midcap and Federated Hermes 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 Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Midcap and Federated Hermes.
Diversification Opportunities for Alger Midcap and Federated Hermes
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alger and Federated is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Alger Midcap Growth and Federated Hermes Conservative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Con 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 Federated Hermes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Hermes Con has no effect on the direction of Alger Midcap i.e., Alger Midcap and Federated Hermes go up and down completely randomly.
Pair Corralation between Alger Midcap and Federated Hermes
Assuming the 90 days horizon Alger Midcap Growth is expected to generate 12.17 times more return on investment than Federated Hermes. However, Alger Midcap is 12.17 times more volatile than Federated Hermes Conservative. It trades about 0.13 of its potential returns per unit of risk. Federated Hermes Conservative is currently generating about 0.21 per unit of risk. If you would invest 798.00 in Alger Midcap Growth on September 13, 2024 and sell it today you would earn a total of 149.00 from holding Alger Midcap Growth or generate 18.67% 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. Federated Hermes Conservative
Performance |
| Timeline |
| Alger Midcap Growth |
| Federated Hermes Con |
Alger Midcap and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Midcap and Federated Hermes
The main advantage of trading using opposite Alger Midcap and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Midcap position performs unexpectedly, Federated Hermes 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 Federated Hermes will offset losses from the drop in Federated Hermes' long position.| Alger Midcap vs. Eic Value Fund | Alger Midcap vs. Ab Value Fund | Alger Midcap vs. Versatile Bond Portfolio | Alger Midcap vs. L Abbett Fundamental |
| Federated Hermes vs. Federated Emerging Market | Federated Hermes vs. Federated Mdt All | Federated Hermes vs. Federated Mdt Balanced | Federated Hermes vs. Federated Global Allocation |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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