Correlation Between Alger Spectra and Alger Smallcap
Can any of the company-specific risk be diversified away by investing in both Alger Spectra 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 Spectra 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 Spectra Fund and Alger Smallcap Growth, you can compare the effects of market volatilities on Alger Spectra 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 Spectra with a short position of Alger Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Spectra and Alger Smallcap.
Diversification Opportunities for Alger Spectra and Alger Smallcap
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alger and Alger is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Alger Spectra Fund 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 Spectra 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 Spectra Fund 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 Spectra i.e., Alger Spectra and Alger Smallcap go up and down completely randomly.
Pair Corralation between Alger Spectra and Alger Smallcap
Assuming the 90 days horizon Alger Spectra is expected to generate 1.03 times less return on investment than Alger Smallcap. But when comparing it to its historical volatility, Alger Spectra Fund is 1.23 times less risky than Alger Smallcap. It trades about 0.26 of its potential returns per unit of risk. Alger Smallcap Growth is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,029 in Alger Smallcap Growth on August 24, 2024 and sell it today you would earn a total of 84.00 from holding Alger Smallcap Growth or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Spectra Fund vs. Alger Smallcap Growth
Performance |
| Timeline |
| Alger Spectra |
| Alger Smallcap Growth |
Alger Spectra and Alger Smallcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Spectra and Alger Smallcap
The main advantage of trading using opposite Alger Spectra and Alger Smallcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Spectra 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 Spectra vs. HUMANA INC | Alger Spectra vs. Aquagold International | Alger Spectra vs. Barloworld Ltd ADR | Alger Spectra vs. Morningstar Unconstrained Allocation |
| Alger Smallcap vs. Ab Impact Municipal | Alger Smallcap vs. Gamco Global Telecommunications | Alger Smallcap vs. Nuveen Minnesota Municipal | Alger Smallcap vs. Bbh Intermediate Municipal |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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