Correlation Between Alger Global and Alger Growth
Can any of the company-specific risk be diversified away by investing in both Alger Global and Alger Growth 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 Growth 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 Growth Income, you can compare the effects of market volatilities on Alger Global and Alger Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Global and Alger Growth.
Diversification Opportunities for Alger Global and Alger Growth
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ALGER and Alger is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Alger Global Growth and Alger Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Growth Income 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 Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Growth Income has no effect on the direction of Alger Global i.e., Alger Global and Alger Growth go up and down completely randomly.
Pair Corralation between Alger Global and Alger Growth
Assuming the 90 days horizon Alger Global is expected to generate 1.04 times less return on investment than Alger Growth. In addition to that, Alger Global is 1.28 times more volatile than Alger Growth Income. It trades about 0.09 of its total potential returns per unit of risk. Alger Growth Income is currently generating about 0.12 per unit of volatility. If you would invest 2,435 in Alger Growth Income on August 31, 2024 and sell it today you would earn a total of 922.00 from holding Alger Growth Income or generate 37.86% 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 Growth Income
Performance |
| Timeline |
| Alger Global Growth |
| Alger Growth Income |
Alger Global and Alger Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Global and Alger Growth
The main advantage of trading using opposite Alger Global and Alger Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Global position performs unexpectedly, Alger Growth 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 Growth will offset losses from the drop in Alger Growth's long position.| Alger Global vs. Lifestyle Ii Moderate | Alger Global vs. Calvert Moderate Allocation | Alger Global vs. Saat Moderate Strategy | Alger Global vs. Multimanager Lifestyle Moderate |
| Alger Growth vs. Aquagold International | Alger Growth vs. Morningstar Unconstrained Allocation | Alger Growth vs. Thrivent High Yield | Alger Growth vs. Via Renewables |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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