Correlation Between Baron Emerging and Alger Smidcap
Can any of the company-specific risk be diversified away by investing in both Baron Emerging and Alger Smidcap 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 Baron Emerging and Alger Smidcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Emerging Markets and Alger Smidcap Focus, you can compare the effects of market volatilities on Baron Emerging and Alger Smidcap 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 Baron Emerging with a short position of Alger Smidcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Emerging and Alger Smidcap.
Diversification Opportunities for Baron Emerging and Alger Smidcap
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and Alger is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Baron Emerging Markets and Alger Smidcap Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Smidcap Focus and Baron Emerging 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 Baron Emerging Markets are associated (or correlated) with Alger Smidcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Smidcap Focus has no effect on the direction of Baron Emerging i.e., Baron Emerging and Alger Smidcap go up and down completely randomly.
Pair Corralation between Baron Emerging and Alger Smidcap
Assuming the 90 days horizon Baron Emerging is expected to generate 7.03 times less return on investment than Alger Smidcap. But when comparing it to its historical volatility, Baron Emerging Markets is 1.29 times less risky than Alger Smidcap. It trades about 0.03 of its potential returns per unit of risk. Alger Smidcap Focus is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,445 in Alger Smidcap Focus on September 2, 2024 and sell it today you would earn a total of 195.00 from holding Alger Smidcap Focus or generate 13.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Emerging Markets vs. Alger Smidcap Focus
Performance |
| Timeline |
| Baron Emerging Markets |
| Alger Smidcap Focus |
Baron Emerging and Alger Smidcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Emerging and Alger Smidcap
The main advantage of trading using opposite Baron Emerging and Alger Smidcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Emerging position performs unexpectedly, Alger Smidcap 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 Smidcap will offset losses from the drop in Alger Smidcap's long position.| Baron Emerging vs. Eaton Vance Income | Baron Emerging vs. Baird Aggregate Bond | Baron Emerging vs. Champlain Small | Baron Emerging vs. Mfs Emerging Markets |
| Alger Smidcap vs. Moderately Aggressive Balanced | Alger Smidcap vs. Multimanager Lifestyle Moderate | Alger Smidcap vs. Tiaa Cref Lifestyle Moderate | Alger Smidcap vs. Wisdomtree Siegel Moderate |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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