Correlation Between Alger Smidcap and Alger Smallcap
Can any of the company-specific risk be diversified away by investing in both Alger Smidcap and Alger Smallcap 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 Smidcap and Alger Smallcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Smidcap Focus and Alger Smallcap Growth, you can compare the effects of market volatilities on Alger Smidcap and Alger Smallcap 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 Smidcap with a short position of Alger Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Smidcap and Alger Smallcap.
Diversification Opportunities for Alger Smidcap and Alger Smallcap
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alger and Alger is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Alger Smidcap Focus and Alger Smallcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Smallcap Growth and Alger Smidcap 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 Smidcap Focus are associated (or correlated) with Alger Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Smallcap Growth has no effect on the direction of Alger Smidcap i.e., Alger Smidcap and Alger Smallcap go up and down completely randomly.
Pair Corralation between Alger Smidcap and Alger Smallcap
Assuming the 90 days horizon Alger Smidcap Focus is expected to generate 1.04 times more return on investment than Alger Smallcap. However, Alger Smidcap is 1.04 times more volatile than Alger Smallcap Growth. It trades about 0.1 of its potential returns per unit of risk. Alger Smallcap Growth is currently generating about 0.09 per unit of risk. If you would invest 1,300 in Alger Smidcap Focus on September 1, 2024 and sell it today you would earn a total of 234.00 from holding Alger Smidcap Focus or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Smidcap Focus vs. Alger Smallcap Growth
Performance |
| Timeline |
| Alger Smidcap Focus |
| Alger Smallcap Growth |
Alger Smidcap and Alger Smallcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Smidcap and Alger Smallcap
The main advantage of trading using opposite Alger Smidcap and Alger Smallcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Smidcap position performs unexpectedly, Alger Smallcap 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 Smallcap will offset losses from the drop in Alger Smallcap's long position.| Alger Smidcap vs. Allianzgi Technology Fund | Alger Smidcap vs. Blackrock Science Technology | Alger Smidcap vs. Technology Ultrasector Profund | Alger Smidcap vs. Science Technology Fund |
| Alger Smallcap vs. Alger Midcap Growth | Alger Smallcap vs. Alger Midcap Growth | Alger Smallcap vs. Alger Mid Cap | Alger Smallcap vs. Alger 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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