Correlation Between Alger Mid and Appleseed Fund
Can any of the company-specific risk be diversified away by investing in both Alger Mid and Appleseed 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 Mid and Appleseed Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Mid Cap and Appleseed Fund Appleseed, you can compare the effects of market volatilities on Alger Mid and Appleseed 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 Mid with a short position of Appleseed Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Mid and Appleseed Fund.
Diversification Opportunities for Alger Mid and Appleseed Fund
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alger and Appleseed is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Alger Mid Cap and Appleseed Fund Appleseed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appleseed Fund Appleseed and Alger Mid 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 Mid Cap are associated (or correlated) with Appleseed Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appleseed Fund Appleseed has no effect on the direction of Alger Mid i.e., Alger Mid and Appleseed Fund go up and down completely randomly.
Pair Corralation between Alger Mid and Appleseed Fund
Assuming the 90 days horizon Alger Mid Cap is expected to generate 1.49 times more return on investment than Appleseed Fund. However, Alger Mid is 1.49 times more volatile than Appleseed Fund Appleseed. It trades about 0.47 of its potential returns per unit of risk. Appleseed Fund Appleseed is currently generating about 0.27 per unit of risk. If you would invest 1,944 in Alger Mid Cap on September 1, 2024 and sell it today you would earn a total of 236.00 from holding Alger Mid Cap or generate 12.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Alger Mid Cap vs. Appleseed Fund Appleseed
Performance |
| Timeline |
| Alger Mid Cap |
| Appleseed Fund Appleseed |
Alger Mid and Appleseed Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Mid and Appleseed Fund
The main advantage of trading using opposite Alger Mid and Appleseed Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Mid position performs unexpectedly, Appleseed 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 Appleseed Fund will offset losses from the drop in Appleseed Fund's long position.| Alger Mid vs. T Rowe Price | Alger Mid vs. Morningstar Unconstrained Allocation | Alger Mid vs. Victory Strategic Allocation | Alger Mid vs. Alternative Asset Allocation |
| Appleseed Fund vs. Government Securities Fund | Appleseed Fund vs. Goldman Sachs Government | Appleseed Fund vs. Us Government Securities | Appleseed Fund vs. Virtus Seix Government |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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