Correlation Between Aig Government and Alger Small
Can any of the company-specific risk be diversified away by investing in both Aig Government and Alger Small 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 Aig Government and Alger Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aig Government Money and Alger Small Cap, you can compare the effects of market volatilities on Aig Government and Alger Small 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 Aig Government with a short position of Alger Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Alger Small.
Diversification Opportunities for Aig Government and Alger Small
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aig and Alger is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Alger Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Small Cap and Aig Government 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 Aig Government Money are associated (or correlated) with Alger Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Small Cap has no effect on the direction of Aig Government i.e., Aig Government and Alger Small go up and down completely randomly.
Pair Corralation between Aig Government and Alger Small
Assuming the 90 days horizon Aig Government Money is expected to under-perform the Alger Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aig Government Money is 5.87 times less risky than Alger Small. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Alger Small Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,811 in Alger Small Cap on August 31, 2024 and sell it today you would earn a total of 117.00 from holding Alger Small Cap or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Alger Small Cap
Performance |
| Timeline |
| Aig Government Money |
| Alger Small Cap |
Aig Government and Alger Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Alger Small
The main advantage of trading using opposite Aig Government and Alger Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Alger Small 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 Small will offset losses from the drop in Alger Small's long position.| Aig Government vs. Western Asset Inflation | Aig Government vs. Aqr Managed Futures | Aig Government vs. Nationwide Inflation Protected Securities | Aig Government vs. Cref Inflation Linked Bond |
| Alger Small vs. Pimco Diversified Income | Alger Small vs. Prudential Core Conservative | Alger Small vs. Harbor Diversified International | Alger Small vs. Huber Capital Diversified |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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