Correlation Between Smallcap Growth and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Smallcap Growth 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 Smallcap Growth and Alger Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Growth Fund and Alger Capital Appreciation, you can compare the effects of market volatilities on Smallcap Growth 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 Smallcap Growth with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Growth and Alger Capital.
Diversification Opportunities for Smallcap Growth and Alger Capital
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Smallcap and Alger is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Growth 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 Smallcap Growth 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 Smallcap Growth 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 Smallcap Growth i.e., Smallcap Growth and Alger Capital go up and down completely randomly.
Pair Corralation between Smallcap Growth and Alger Capital
Assuming the 90 days horizon Smallcap Growth Fund is expected to generate 0.69 times more return on investment than Alger Capital. However, Smallcap Growth Fund is 1.45 times less risky than Alger Capital. It trades about 0.18 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.03 per unit of risk. If you would invest 1,496 in Smallcap Growth Fund on October 22, 2024 and sell it today you would earn a total of 46.00 from holding Smallcap Growth Fund or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap Growth Fund vs. Alger Capital Appreciation
Performance |
| Timeline |
| Smallcap Growth |
| Alger Capital Apprec |
Smallcap Growth and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Growth and Alger Capital
The main advantage of trading using opposite Smallcap Growth and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Growth 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.| Smallcap Growth vs. Fisher Large Cap | Smallcap Growth vs. Qs Large Cap | Smallcap Growth vs. Tax Managed Large Cap | Smallcap Growth vs. Avantis Large Cap |
| Alger Capital vs. Calvert Conservative Allocation | Alger Capital vs. Jhancock Diversified Macro | Alger Capital vs. Allianzgi Diversified Income | Alger Capital vs. Tiaa Cref Lifestyle Conservative |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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