Correlation Between Alger Global and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Alger 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 Alger 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 Alger Global Growth and Alger Capital Appreciation, you can compare the effects of market volatilities on Alger 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 Alger Global with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Global and Alger Capital.
Diversification Opportunities for Alger Global and Alger Capital
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alger and Alger is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Alger Global Growth 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 Alger 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 Alger Global Growth 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 Alger Global i.e., Alger Global and Alger Capital go up and down completely randomly.
Pair Corralation between Alger Global and Alger Capital
Assuming the 90 days horizon Alger Global is expected to generate 1.48 times less return on investment than Alger Capital. But when comparing it to its historical volatility, Alger Global Growth is 1.36 times less risky than Alger Capital. It trades about 0.1 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,446 in Alger Capital Appreciation on August 29, 2024 and sell it today you would earn a total of 1,684 from holding Alger Capital Appreciation or generate 48.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Global Growth vs. Alger Capital Appreciation
Performance |
| Timeline |
| Alger Global Growth |
| Alger Capital Apprec |
Alger Global and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Global and Alger Capital
The main advantage of trading using opposite Alger Global and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger 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.| Alger Global vs. Ab Small Cap | Alger Global vs. Artisan Small Cap | Alger Global vs. Small Pany Growth | Alger Global vs. Qs Small Capitalization |
| Alger Capital vs. Dodge Cox Stock | Alger Capital vs. Dunham Large Cap | Alger Capital vs. Pace Large Value | Alger Capital vs. Transamerica Large Cap |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |