Correlation Between Dow Jones and Alger Global
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Alger Global 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 Dow Jones and Alger Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Alger Global Growth, you can compare the effects of market volatilities on Dow Jones and Alger Global 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 Dow Jones with a short position of Alger Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Alger Global.
Diversification Opportunities for Dow Jones and Alger Global
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dow and Alger is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Alger Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Global Growth and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Alger Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Global Growth has no effect on the direction of Dow Jones i.e., Dow Jones and Alger Global go up and down completely randomly.
Pair Corralation between Dow Jones and Alger Global
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.21 times more return on investment than Alger Global. However, Dow Jones is 1.21 times more volatile than Alger Global Growth. It trades about 0.37 of its potential returns per unit of risk. Alger Global Growth is currently generating about 0.35 per unit of risk. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Alger Global Growth
Performance |
| Timeline |
Dow Jones and Alger Global Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Alger Global Growth
Pair trading matchups for Alger Global
Pair Trading with Dow Jones and Alger Global
The main advantage of trading using opposite Dow Jones and Alger Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Alger Global 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 Global will offset losses from the drop in Alger Global's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Alger Global vs. Icon Equity Income | Alger Global vs. The Gabelli Equity | Alger Global vs. Huber Capital Equity | Alger Global vs. Jpmorgan Equity Income |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |