Correlation Between Aam Select and Alger Midcap
Can any of the company-specific risk be diversified away by investing in both Aam Select and Alger Midcap 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 Aam Select and Alger Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aam Select Income and Alger Midcap Growth, you can compare the effects of market volatilities on Aam Select and Alger Midcap 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 Aam Select with a short position of Alger Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam Select and Alger Midcap.
Diversification Opportunities for Aam Select and Alger Midcap
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aam and Alger is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aam Select Income and Alger Midcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Midcap Growth and Aam Select 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 Aam Select Income are associated (or correlated) with Alger Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Midcap Growth has no effect on the direction of Aam Select i.e., Aam Select and Alger Midcap go up and down completely randomly.
Pair Corralation between Aam Select and Alger Midcap
Assuming the 90 days horizon Aam Select Income is expected to under-perform the Alger Midcap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aam Select Income is 3.23 times less risky than Alger Midcap. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Alger Midcap Growth is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 799.00 in Alger Midcap Growth on September 12, 2024 and sell it today you would earn a total of 134.00 from holding Alger Midcap Growth or generate 16.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aam Select Income vs. Alger Midcap Growth
Performance |
| Timeline |
| Aam Select Income |
| Alger Midcap Growth |
Aam Select and Alger Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam Select and Alger Midcap
The main advantage of trading using opposite Aam Select and Alger Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam Select position performs unexpectedly, Alger Midcap 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 Midcap will offset losses from the drop in Alger Midcap's long position.| Aam Select vs. Guggenheim Diversified Income | Aam Select vs. Federated Hermes Conservative | Aam Select vs. Global Diversified Income | Aam Select vs. Jpmorgan Diversified Fund |
| Alger Midcap vs. Federated Hermes Conservative | Alger Midcap vs. Elfun Diversified Fund | Alger Midcap vs. Stone Ridge Diversified | Alger Midcap vs. Blackrock Conservative Prprdptfinstttnl |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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