Correlation Between Alger Mid and Alger Spectra
Can any of the company-specific risk be diversified away by investing in both Alger Mid and Alger Spectra 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 Alger Spectra 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 Alger Spectra Fund, you can compare the effects of market volatilities on Alger Mid and Alger Spectra 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 Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Mid and Alger Spectra.
Diversification Opportunities for Alger Mid and Alger Spectra
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Alger and Alger is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Alger Mid Cap and Alger Spectra Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra 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 Alger Spectra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Spectra has no effect on the direction of Alger Mid i.e., Alger Mid and Alger Spectra go up and down completely randomly.
Pair Corralation between Alger Mid and Alger Spectra
Assuming the 90 days horizon Alger Mid Cap is expected to generate 0.9 times more return on investment than Alger Spectra. However, Alger Mid Cap is 1.11 times less risky than Alger Spectra. It trades about 0.3 of its potential returns per unit of risk. Alger Spectra Fund is currently generating about 0.23 per unit of risk. If you would invest 1,926 in Alger Mid Cap on August 29, 2024 and sell it today you would earn a total of 260.00 from holding Alger Mid Cap or generate 13.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Mid Cap vs. Alger Spectra Fund
Performance |
| Timeline |
| Alger Mid Cap |
| Alger Spectra |
Alger Mid and Alger Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Mid and Alger Spectra
The main advantage of trading using opposite Alger Mid and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Mid position performs unexpectedly, Alger Spectra 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 Alger Spectra will offset losses from the drop in Alger Spectra's long position.| Alger Mid vs. Gamco Natural Resources | Alger Mid vs. Gmo Resources | Alger Mid vs. Energy Services Fund | Alger Mid vs. Jennison Natural Resources |
| Alger Spectra vs. Prudential High Yield | Alger Spectra vs. Prudential High Yield | Alger Spectra vs. Virtus High Yield | Alger Spectra vs. Pace High Yield |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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