Correlation Between Shelton Emerging and Alger Smallcap
Can any of the company-specific risk be diversified away by investing in both Shelton Emerging and Alger Smallcap 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 Shelton Emerging and Alger Smallcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton Emerging Markets and Alger Smallcap Growth, you can compare the effects of market volatilities on Shelton Emerging and Alger Smallcap 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 Shelton Emerging with a short position of Alger Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Emerging and Alger Smallcap.
Diversification Opportunities for Shelton Emerging and Alger Smallcap
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shelton and Alger is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Emerging Markets and Alger Smallcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Smallcap Growth and Shelton Emerging 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 Shelton Emerging Markets are associated (or correlated) with Alger Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Smallcap Growth has no effect on the direction of Shelton Emerging i.e., Shelton Emerging and Alger Smallcap go up and down completely randomly.
Pair Corralation between Shelton Emerging and Alger Smallcap
Assuming the 90 days horizon Shelton Emerging is expected to generate 3.96 times less return on investment than Alger Smallcap. But when comparing it to its historical volatility, Shelton Emerging Markets is 1.3 times less risky than Alger Smallcap. It trades about 0.02 of its potential returns per unit of risk. Alger Smallcap Growth is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 853.00 in Alger Smallcap Growth on September 14, 2024 and sell it today you would earn a total of 319.00 from holding Alger Smallcap Growth or generate 37.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Shelton Emerging Markets vs. Alger Smallcap Growth
Performance |
| Timeline |
| Shelton Emerging Markets |
| Alger Smallcap Growth |
Shelton Emerging and Alger Smallcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Emerging and Alger Smallcap
The main advantage of trading using opposite Shelton Emerging and Alger Smallcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Emerging position performs unexpectedly, Alger Smallcap 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 Smallcap will offset losses from the drop in Alger Smallcap's long position.| Shelton Emerging vs. Shelton Emerging Markets | Shelton Emerging vs. California Tax Free Income | Shelton Emerging vs. Shelton Funds | Shelton Emerging vs. Nasdaq 100 Index Fund |
| Alger Smallcap vs. Kinetics Market Opportunities | Alger Smallcap vs. Western Asset Diversified | Alger Smallcap vs. Transamerica Emerging Markets | Alger Smallcap vs. Shelton Emerging Markets |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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