Correlation Between Franklin Growth and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Alger Capital 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 Franklin Growth and Alger Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Growth Opportunities and Alger Capital Appreciation, you can compare the effects of market volatilities on Franklin Growth and Alger Capital 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 Franklin Growth with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Alger Capital.
Diversification Opportunities for Franklin Growth and Alger Capital
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Alger is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Alger Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Capital Apprec and Franklin Growth 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 Franklin Growth Opportunities are associated (or correlated) with Alger Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Capital Apprec has no effect on the direction of Franklin Growth i.e., Franklin Growth and Alger Capital go up and down completely randomly.
Pair Corralation between Franklin Growth and Alger Capital
Assuming the 90 days horizon Franklin Growth Opportunities is expected to under-perform the Alger Capital. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Growth Opportunities is 1.24 times less risky than Alger Capital. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Alger Capital Appreciation is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,783 in Alger Capital Appreciation on October 22, 2024 and sell it today you would earn a total of 24.00 from holding Alger Capital Appreciation or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Growth Opportunities vs. Alger Capital Appreciation
Performance |
| Timeline |
| Franklin Growth Oppo |
| Alger Capital Apprec |
Franklin Growth and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Alger Capital
The main advantage of trading using opposite Franklin Growth and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Alger Capital 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 Capital will offset losses from the drop in Alger Capital's long position.| Franklin Growth vs. Sp Smallcap 600 | Franklin Growth vs. Glg Intl Small | Franklin Growth vs. Praxis Small Cap | Franklin Growth vs. Smallcap Fund Fka |
| Alger Capital vs. Calvert Conservative Allocation | Alger Capital vs. Jhancock Diversified Macro | Alger Capital vs. Allianzgi Diversified Income | Alger Capital vs. Tiaa Cref Lifestyle Conservative |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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