Correlation Between Barings Global and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Barings Global and Alger Capital 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 Barings Global and Alger Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Alger Capital Appreciation, you can compare the effects of market volatilities on Barings Global and Alger Capital 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 Barings Global with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Alger Capital.
Diversification Opportunities for Barings Global and Alger Capital
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and Alger is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Alger Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Capital Apprec and Barings Global 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 Barings Global Floating are associated (or correlated) with Alger Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Capital Apprec has no effect on the direction of Barings Global i.e., Barings Global and Alger Capital go up and down completely randomly.
Pair Corralation between Barings Global and Alger Capital
Assuming the 90 days horizon Barings Global is expected to generate 29.21 times less return on investment than Alger Capital. But when comparing it to its historical volatility, Barings Global Floating is 21.28 times less risky than Alger Capital. It trades about 0.31 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 4,690 in Alger Capital Appreciation on September 4, 2024 and sell it today you would earn a total of 510.00 from holding Alger Capital Appreciation or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Barings Global Floating vs. Alger Capital Appreciation
Performance |
| Timeline |
| Barings Global Floating |
| Alger Capital Apprec |
Barings Global and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Alger Capital
The main advantage of trading using opposite Barings Global and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Alger Capital 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 Capital will offset losses from the drop in Alger Capital's long position.| Barings Global vs. Dreyfusstandish Global Fixed | Barings Global vs. Morningstar Global Income | Barings Global vs. Franklin Mutual Global | Barings Global vs. Ab Global Real |
| Alger Capital vs. Artisan High Income | Alger Capital vs. Maryland Tax Free Bond | Alger Capital vs. Multisector Bond Sma | Alger Capital vs. Lind Capital Partners |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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