Correlation Between Emerging Markets and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Emerging Markets 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 Emerging Markets and Alger Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Portfolio and Alger Capital Appreciation, you can compare the effects of market volatilities on Emerging Markets 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 Emerging Markets with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Alger Capital.
Diversification Opportunities for Emerging Markets and Alger Capital
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Emerging and Alger is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Portfolio 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 Emerging Markets 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 Emerging Markets Portfolio 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 Emerging Markets i.e., Emerging Markets and Alger Capital go up and down completely randomly.
Pair Corralation between Emerging Markets and Alger Capital
Assuming the 90 days horizon Emerging Markets Portfolio is expected to under-perform the Alger Capital. But the mutual fund apears to be less risky and, when comparing its historical volatility, Emerging Markets Portfolio is 1.45 times less risky than Alger Capital. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Alger Capital Appreciation is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 4,493 in Alger Capital Appreciation on September 1, 2024 and sell it today you would earn a total of 455.00 from holding Alger Capital Appreciation or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets Portfolio vs. Alger Capital Appreciation
Performance |
| Timeline |
| Emerging Markets Por |
| Alger Capital Apprec |
Emerging Markets and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Alger Capital
The main advantage of trading using opposite Emerging Markets and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets 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.| Emerging Markets vs. Lord Abbett Convertible | Emerging Markets vs. Gabelli Convertible And | Emerging Markets vs. Allianzgi Convertible Income | Emerging Markets vs. Columbia Vertible Securities |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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