Correlation Between Alger Smidcap and The Hartford
Can any of the company-specific risk be diversified away by investing in both Alger Smidcap and The Hartford 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 The Hartford 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 The Hartford Midcap, you can compare the effects of market volatilities on Alger Smidcap and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Smidcap and The Hartford.
Diversification Opportunities for Alger Smidcap and The Hartford
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alger and The is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Alger Smidcap Focus and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Midcap has no effect on the direction of Alger Smidcap i.e., Alger Smidcap and The Hartford go up and down completely randomly.
Pair Corralation between Alger Smidcap and The Hartford
Assuming the 90 days horizon Alger Smidcap Focus is expected to under-perform the The Hartford. In addition to that, Alger Smidcap is 1.12 times more volatile than The Hartford Midcap. It trades about -0.44 of its total potential returns per unit of risk. The Hartford Midcap is currently generating about -0.25 per unit of volatility. If you would invest 2,837 in The Hartford Midcap on November 29, 2024 and sell it today you would lose (162.00) from holding The Hartford Midcap or give up 5.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Smidcap Focus vs. The Hartford Midcap
Performance |
| Timeline |
| Alger Smidcap Focus |
| Hartford Midcap |
Alger Smidcap and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Smidcap and The Hartford
The main advantage of trading using opposite Alger Smidcap and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Smidcap position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Alger Smidcap vs. American Funds Retirement | Alger Smidcap vs. Voya Retirement Growth | Alger Smidcap vs. Vanguard Target Retirement | Alger Smidcap vs. Tiaa Cref Lifestyle Moderate |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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