Correlation Between Alger Mid and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Alger Mid and Stone Harbor 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 Stone Harbor 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 Stone Harbor Emerging, you can compare the effects of market volatilities on Alger Mid and Stone Harbor 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 Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Mid and Stone Harbor.
Diversification Opportunities for Alger Mid and Stone Harbor
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Alger and Stone is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Alger Mid Cap and Stone Harbor Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Harbor Emerging 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 Stone Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Harbor Emerging has no effect on the direction of Alger Mid i.e., Alger Mid and Stone Harbor go up and down completely randomly.
Pair Corralation between Alger Mid and Stone Harbor
Assuming the 90 days horizon Alger Mid Cap is expected to generate 3.43 times more return on investment than Stone Harbor. However, Alger Mid is 3.43 times more volatile than Stone Harbor Emerging. It trades about 0.09 of its potential returns per unit of risk. Stone Harbor Emerging is currently generating about 0.12 per unit of risk. If you would invest 1,881 in Alger Mid Cap on September 3, 2024 and sell it today you would earn a total of 299.00 from holding Alger Mid Cap or generate 15.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Mid Cap vs. Stone Harbor Emerging
Performance |
| Timeline |
| Alger Mid Cap |
| Stone Harbor Emerging |
Alger Mid and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Mid and Stone Harbor
The main advantage of trading using opposite Alger Mid and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Mid position performs unexpectedly, Stone Harbor 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 Stone Harbor will offset losses from the drop in Stone Harbor's long position.| Alger Mid vs. Cs 607 Tax | Alger Mid vs. Franklin High Yield | Alger Mid vs. T Rowe Price | Alger Mid vs. Intermediate Term Tax Free Bond |
| Stone Harbor vs. Fidelity New Markets | Stone Harbor vs. Fidelity New Markets | Stone Harbor vs. Fidelity New Markets | Stone Harbor vs. Fidelity New Markets |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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