Correlation Between Elfun Diversified and Alger Midcap
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified 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 Elfun Diversified and Alger Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elfun Diversified Fund and Alger Midcap Growth, you can compare the effects of market volatilities on Elfun Diversified 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 Elfun Diversified with a short position of Alger Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Alger Midcap.
Diversification Opportunities for Elfun Diversified and Alger Midcap
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elfun and Alger is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund 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 Elfun Diversified 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 Elfun Diversified Fund 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 Elfun Diversified i.e., Elfun Diversified and Alger Midcap go up and down completely randomly.
Pair Corralation between Elfun Diversified and Alger Midcap
Assuming the 90 days horizon Elfun Diversified is expected to generate 10.54 times less return on investment than Alger Midcap. But when comparing it to its historical volatility, Elfun Diversified Fund is 2.84 times less risky than Alger Midcap. It trades about 0.05 of its potential returns per unit of risk. Alger Midcap Growth is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 868.00 in Alger Midcap Growth on September 13, 2024 and sell it today you would earn a total of 79.00 from holding Alger Midcap Growth or generate 9.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elfun Diversified Fund vs. Alger Midcap Growth
Performance |
| Timeline |
| Elfun Diversified |
| Alger Midcap Growth |
Elfun Diversified and Alger Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Diversified and Alger Midcap
The main advantage of trading using opposite Elfun Diversified and Alger Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified 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.| Elfun Diversified vs. State Street Target | Elfun Diversified vs. State Street Target | Elfun Diversified vs. Ssga International Stock | Elfun Diversified vs. State Street Target |
| Alger Midcap vs. Eic Value Fund | Alger Midcap vs. Ab Value Fund | Alger Midcap vs. Versatile Bond Portfolio | Alger Midcap vs. L Abbett Fundamental |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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