Correlation Between Alger Small and Alger Funds
Can any of the company-specific risk be diversified away by investing in both Alger Small and Alger Funds 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 Small and Alger Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Small Cap and Alger Funds Mid, you can compare the effects of market volatilities on Alger Small and Alger Funds 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 Small with a short position of Alger Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Small and Alger Funds.
Diversification Opportunities for Alger Small and Alger Funds
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alger and Alger is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Alger Small Cap and Alger Funds Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Funds Mid and Alger Small 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 Small Cap are associated (or correlated) with Alger Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Funds Mid has no effect on the direction of Alger Small i.e., Alger Small and Alger Funds go up and down completely randomly.
Pair Corralation between Alger Small and Alger Funds
Assuming the 90 days horizon Alger Small Cap is expected to generate 1.33 times more return on investment than Alger Funds. However, Alger Small is 1.33 times more volatile than Alger Funds Mid. It trades about 0.31 of its potential returns per unit of risk. Alger Funds Mid is currently generating about 0.4 per unit of risk. If you would invest 1,879 in Alger Small Cap on August 24, 2024 and sell it today you would earn a total of 240.00 from holding Alger Small Cap or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Small Cap vs. Alger Funds Mid
Performance |
| Timeline |
| Alger Small Cap |
| Alger Funds Mid |
Alger Small and Alger Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Small and Alger Funds
The main advantage of trading using opposite Alger Small and Alger Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Small position performs unexpectedly, Alger Funds 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 Funds will offset losses from the drop in Alger Funds' long position.| Alger Small vs. Invesco Vertible Securities | Alger Small vs. Teton Vertible Securities | Alger Small vs. Lord Abbett Vertible | Alger Small vs. Mainstay Vertible Fund |
| Alger Funds vs. T Rowe Price | Alger Funds vs. T Rowe Price | Alger Funds vs. T Rowe Price | Alger Funds vs. T Rowe Price |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |