Correlation Between Global X and Alger Mid
Can any of the company-specific risk be diversified away by investing in both Global X and Alger Mid 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 Global X and Alger Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Thematic and Alger Mid Cap, you can compare the effects of market volatilities on Global X and Alger Mid 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 Global X with a short position of Alger Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Alger Mid.
Diversification Opportunities for Global X and Alger Mid
Poor diversification
The 3 months correlation between Global and Alger is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Global X Thematic and Alger Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Mid Cap and Global X 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 Global X Thematic are associated (or correlated) with Alger Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Mid Cap has no effect on the direction of Global X i.e., Global X and Alger Mid go up and down completely randomly.
Pair Corralation between Global X and Alger Mid
Given the investment horizon of 90 days Global X Thematic is expected to generate 0.52 times more return on investment than Alger Mid. However, Global X Thematic is 1.94 times less risky than Alger Mid. It trades about 0.17 of its potential returns per unit of risk. Alger Mid Cap is currently generating about -0.03 per unit of risk. If you would invest 2,394 in Global X Thematic on November 27, 2024 and sell it today you would earn a total of 68.00 from holding Global X Thematic or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Thematic vs. Alger Mid Cap
Performance |
| Timeline |
| Global X Thematic |
| Alger Mid Cap |
Global X and Alger Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Alger Mid
The main advantage of trading using opposite Global X and Alger Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Alger Mid 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 Mid will offset losses from the drop in Alger Mid's long position.The idea behind Global X Thematic and Alger Mid Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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