Correlation Between Janus Forty and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Janus Forty 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 Janus Forty and Alger Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus Forty Fund and Alger Capital Appreciation, you can compare the effects of market volatilities on Janus Forty 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 Janus Forty with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Forty and Alger Capital.
Diversification Opportunities for Janus Forty and Alger Capital
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Janus and Alger is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Janus Forty Fund 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 Janus Forty 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 Janus Forty Fund 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 Janus Forty i.e., Janus Forty and Alger Capital go up and down completely randomly.
Pair Corralation between Janus Forty and Alger Capital
Assuming the 90 days horizon Janus Forty is expected to generate 3.75 times less return on investment than Alger Capital. But when comparing it to its historical volatility, Janus Forty Fund is 1.33 times less risky than Alger Capital. It trades about 0.08 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,594 in Alger Capital Appreciation on August 26, 2024 and sell it today you would earn a total of 319.00 from holding Alger Capital Appreciation or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Janus Forty Fund vs. Alger Capital Appreciation
Performance |
| Timeline |
| Janus Forty Fund |
| Alger Capital Apprec |
Janus Forty and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus Forty and Alger Capital
The main advantage of trading using opposite Janus Forty and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Forty 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.| Janus Forty vs. Janus Overseas Fund | Janus Forty vs. Janus Enterprise Fund | Janus Forty vs. The Hartford Growth | Janus Forty vs. Janus Forty Fund |
| Alger Capital vs. Alger Midcap Growth | Alger Capital vs. Alger Smallcap Growth | Alger Capital vs. Victory Sycamore Established | Alger Capital vs. Janus Overseas Fund |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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