Correlation Between Alger Global and Alger Mid
Can any of the company-specific risk be diversified away by investing in both Alger Global and Alger Mid 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 Mid 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 Mid Cap, you can compare the effects of market volatilities on Alger Global and Alger Mid 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 Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Global and Alger Mid.
Diversification Opportunities for Alger Global and Alger Mid
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alger and Alger is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Alger Global Growth and Alger Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Mid Cap 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 Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Mid Cap has no effect on the direction of Alger Global i.e., Alger Global and Alger Mid go up and down completely randomly.
Pair Corralation between Alger Global and Alger Mid
Assuming the 90 days horizon Alger Global is expected to generate 2.19 times less return on investment than Alger Mid. But when comparing it to its historical volatility, Alger Global Growth is 1.45 times less risky than Alger Mid. It trades about 0.12 of its potential returns per unit of risk. Alger Mid Cap is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,056 in Alger Mid Cap on November 2, 2024 and sell it today you would earn a total of 111.00 from holding Alger Mid Cap or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Global Growth vs. Alger Mid Cap
Performance |
| Timeline |
| Alger Global Growth |
| Alger Mid Cap |
Alger Global and Alger Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Global and Alger Mid
The main advantage of trading using opposite Alger Global and Alger Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Global position performs unexpectedly, Alger Mid 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 Mid will offset losses from the drop in Alger Mid's long position.| Alger Global vs. Alger Midcap Growth | Alger Global vs. Alger Midcap Growth | Alger Global vs. Alger Mid Cap | Alger Global vs. Alger Small Cap |
| Alger Mid vs. Angel Oak Ultrashort | Alger Mid vs. Aqr Sustainable Long Short | Alger Mid vs. Transam Short Term Bond | Alger Mid vs. Nuveen Short Term |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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