Correlation Between Alger Spectra and Ariel Focus
Can any of the company-specific risk be diversified away by investing in both Alger Spectra and Ariel Focus 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 Ariel Focus 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 Ariel Focus Fund, you can compare the effects of market volatilities on Alger Spectra and Ariel Focus 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 Ariel Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Spectra and Ariel Focus.
Diversification Opportunities for Alger Spectra and Ariel Focus
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alger and Ariel is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Alger Spectra Fund and Ariel Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ariel Focus Fund 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 Ariel Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ariel Focus Fund has no effect on the direction of Alger Spectra i.e., Alger Spectra and Ariel Focus go up and down completely randomly.
Pair Corralation between Alger Spectra and Ariel Focus
Assuming the 90 days horizon Alger Spectra Fund is expected to generate 1.25 times more return on investment than Ariel Focus. However, Alger Spectra is 1.25 times more volatile than Ariel Focus Fund. It trades about 0.21 of its potential returns per unit of risk. Ariel Focus Fund is currently generating about 0.14 per unit of risk. If you would invest 2,616 in Alger Spectra Fund on August 29, 2024 and sell it today you would earn a total of 464.00 from holding Alger Spectra Fund or generate 17.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Alger Spectra Fund vs. Ariel Focus Fund
Performance |
| Timeline |
| Alger Spectra |
| Ariel Focus Fund |
Alger Spectra and Ariel Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Spectra and Ariel Focus
The main advantage of trading using opposite Alger Spectra and Ariel Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Spectra position performs unexpectedly, Ariel Focus 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 Ariel Focus will offset losses from the drop in Ariel Focus' long position.| Alger Spectra vs. Prudential High Yield | Alger Spectra vs. Prudential High Yield | Alger Spectra vs. Virtus High Yield | Alger Spectra vs. Pace High Yield |
| Ariel Focus vs. Ariel Appreciation Fund | Ariel Focus vs. Ariel Fund Investor | Ariel Focus vs. Ariel Global Fund | Ariel Focus vs. Ariel International Fund |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |