Correlation Between Alger Mid and Global X
Can any of the company-specific risk be diversified away by investing in both Alger Mid and Global X 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 Alger Mid and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Mid Cap and Global X Thematic, you can compare the effects of market volatilities on Alger Mid and Global X 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 Alger Mid with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Mid and Global X.
Diversification Opportunities for Alger Mid and Global X
Poor diversification
The 3 months correlation between Alger and Global is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Alger Mid Cap and Global X Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Thematic and Alger Mid 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 Alger Mid Cap are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Thematic has no effect on the direction of Alger Mid i.e., Alger Mid and Global X go up and down completely randomly.
Pair Corralation between Alger Mid and Global X
Given the investment horizon of 90 days Alger Mid Cap is expected to generate 0.94 times more return on investment than Global X. However, Alger Mid Cap is 1.07 times less risky than Global X. It trades about 0.08 of its potential returns per unit of risk. Global X Thematic is currently generating about 0.01 per unit of risk. If you would invest 1,199 in Alger Mid Cap on September 3, 2024 and sell it today you would earn a total of 808.00 from holding Alger Mid Cap or generate 67.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Mid Cap vs. Global X Thematic
Performance |
| Timeline |
| Alger Mid Cap |
| Global X Thematic |
Alger Mid and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Mid and Global X
The main advantage of trading using opposite Alger Mid and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Mid position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Alger Mid vs. Alger 35 ETF | Alger Mid vs. Invesco SP MidCap | Alger Mid vs. Inspire Faithward Mid | Alger Mid vs. Gabelli ETFs Trust |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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