Correlation Between Alger Mid and Cambiar Smid
Can any of the company-specific risk be diversified away by investing in both Alger Mid and Cambiar Smid 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 Cambiar Smid 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 Cambiar Smid Fund, you can compare the effects of market volatilities on Alger Mid and Cambiar Smid 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 Cambiar Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Mid and Cambiar Smid.
Diversification Opportunities for Alger Mid and Cambiar Smid
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alger and Cambiar is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Alger Mid Cap and Cambiar Smid Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Smid 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 Cambiar Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Smid has no effect on the direction of Alger Mid i.e., Alger Mid and Cambiar Smid go up and down completely randomly.
Pair Corralation between Alger Mid and Cambiar Smid
Assuming the 90 days horizon Alger Mid Cap is expected to generate 1.32 times more return on investment than Cambiar Smid. However, Alger Mid is 1.32 times more volatile than Cambiar Smid Fund. It trades about 0.14 of its potential returns per unit of risk. Cambiar Smid Fund is currently generating about 0.09 per unit of risk. If you would invest 1,804 in Alger Mid Cap on September 1, 2024 and sell it today you would earn a total of 376.00 from holding Alger Mid Cap or generate 20.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Alger Mid Cap vs. Cambiar Smid Fund
Performance |
| Timeline |
| Alger Mid Cap |
| Cambiar Smid |
Alger Mid and Cambiar Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Mid and Cambiar Smid
The main advantage of trading using opposite Alger Mid and Cambiar Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Mid position performs unexpectedly, Cambiar Smid 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 Cambiar Smid will offset losses from the drop in Cambiar Smid'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 |
| Cambiar Smid vs. Cambiar International Equity | Cambiar Smid vs. Cambiar Small Cap | Cambiar Smid vs. Cambiar Opportunity Fund | Cambiar Smid vs. Cambiar Small Cap |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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