Correlation Between Alger Smallcap and Alger Spectra
Can any of the company-specific risk be diversified away by investing in both Alger Smallcap 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 Smallcap 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 Smallcap Growth and Alger Spectra Fund, you can compare the effects of market volatilities on Alger Smallcap 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 Smallcap with a short position of Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Smallcap and Alger Spectra.
Diversification Opportunities for Alger Smallcap and Alger Spectra
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alger and Alger is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Alger Smallcap Growth 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 Smallcap 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 Smallcap Growth 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 Smallcap i.e., Alger Smallcap and Alger Spectra go up and down completely randomly.
Pair Corralation between Alger Smallcap and Alger Spectra
Assuming the 90 days horizon Alger Smallcap is expected to generate 2.01 times less return on investment than Alger Spectra. In addition to that, Alger Smallcap is 1.03 times more volatile than Alger Spectra Fund. It trades about 0.06 of its total potential returns per unit of risk. Alger Spectra Fund is currently generating about 0.13 per unit of volatility. If you would invest 1,796 in Alger Spectra Fund on August 31, 2024 and sell it today you would earn a total of 1,413 from holding Alger Spectra Fund or generate 78.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Smallcap Growth vs. Alger Spectra Fund
Performance |
| Timeline |
| Alger Smallcap Growth |
| Alger Spectra |
Alger Smallcap and Alger Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Smallcap and Alger Spectra
The main advantage of trading using opposite Alger Smallcap and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Smallcap 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 Smallcap vs. Kinetics Small Cap | Alger Smallcap vs. Legg Mason Partners | Alger Smallcap vs. Qs Growth Fund | Alger Smallcap vs. T Rowe Price |
| Alger Spectra vs. Fidelity Series 1000 | Alger Spectra vs. Qs Large Cap | Alger Spectra vs. Qs Large Cap | Alger Spectra vs. Legg Mason Bw |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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