Correlation Between Nebraska Municipal and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Nebraska Municipal 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 Nebraska Municipal and Alger Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nebraska Municipal Fund and Alger Capital Appreciation, you can compare the effects of market volatilities on Nebraska Municipal 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 Nebraska Municipal with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nebraska Municipal and Alger Capital.
Diversification Opportunities for Nebraska Municipal and Alger Capital
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nebraska and Alger is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nebraska Municipal 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 Nebraska Municipal 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 Nebraska Municipal 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 Nebraska Municipal i.e., Nebraska Municipal and Alger Capital go up and down completely randomly.
Pair Corralation between Nebraska Municipal and Alger Capital
Assuming the 90 days horizon Nebraska Municipal is expected to generate 1.05 times less return on investment than Alger Capital. But when comparing it to its historical volatility, Nebraska Municipal Fund is 1.42 times less risky than Alger Capital. It trades about 0.11 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 738.00 in Alger Capital Appreciation on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Alger Capital Appreciation or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nebraska Municipal Fund vs. Alger Capital Appreciation
Performance |
| Timeline |
| Nebraska Municipal |
| Alger Capital Apprec |
Nebraska Municipal and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nebraska Municipal and Alger Capital
The main advantage of trading using opposite Nebraska Municipal and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nebraska Municipal 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.| Nebraska Municipal vs. Lord Abbett Convertible | Nebraska Municipal vs. Harbor Vertible Securities | Nebraska Municipal vs. Virtus Convertible | Nebraska Municipal vs. Rationalpier 88 Convertible |
| Alger Capital vs. Qs Large Cap | Alger Capital vs. Fidelity Series 1000 | Alger Capital vs. Jhancock Disciplined Value | Alger Capital vs. American Mutual 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |