Correlation Between NYSE Composite and Alger Midcap
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Alger Midcap 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 NYSE Composite and Alger Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Alger Midcap Growth, you can compare the effects of market volatilities on NYSE Composite and Alger Midcap 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 NYSE Composite with a short position of Alger Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Alger Midcap.
Diversification Opportunities for NYSE Composite and Alger Midcap
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Alger is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Alger Midcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Midcap Growth and NYSE Composite 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 NYSE Composite are associated (or correlated) with Alger Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Midcap Growth has no effect on the direction of NYSE Composite i.e., NYSE Composite and Alger Midcap go up and down completely randomly.
Pair Corralation between NYSE Composite and Alger Midcap
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.26 times less return on investment than Alger Midcap. But when comparing it to its historical volatility, NYSE Composite is 1.5 times less risky than Alger Midcap. It trades about 0.11 of its potential returns per unit of risk. Alger Midcap Growth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,181 in Alger Midcap Growth on August 31, 2024 and sell it today you would earn a total of 463.00 from holding Alger Midcap Growth or generate 39.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Alger Midcap Growth
Performance |
| Timeline |
NYSE Composite and Alger Midcap Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Alger Midcap Growth
Pair trading matchups for Alger Midcap
Pair Trading with NYSE Composite and Alger Midcap
The main advantage of trading using opposite NYSE Composite and Alger Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Alger Midcap 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 Midcap will offset losses from the drop in Alger Midcap's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Alger Midcap vs. Ab Impact Municipal | Alger Midcap vs. Ab Bond Inflation | Alger Midcap vs. Versatile Bond Portfolio | Alger Midcap vs. Nuveen Arizona Municipal |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |