Correlation Between Templeton Growth and Alger Smidcap
Can any of the company-specific risk be diversified away by investing in both Templeton Growth and Alger Smidcap 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 Templeton Growth and Alger Smidcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Growth Fund and Alger Smidcap Focus, you can compare the effects of market volatilities on Templeton Growth and Alger Smidcap 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 Templeton Growth with a short position of Alger Smidcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Alger Smidcap.
Diversification Opportunities for Templeton Growth and Alger Smidcap
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Templeton and Alger is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Alger Smidcap Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Smidcap Focus and Templeton 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 Templeton Growth Fund are associated (or correlated) with Alger Smidcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Smidcap Focus has no effect on the direction of Templeton Growth i.e., Templeton Growth and Alger Smidcap go up and down completely randomly.
Pair Corralation between Templeton Growth and Alger Smidcap
Assuming the 90 days horizon Templeton Growth is expected to generate 1.98 times less return on investment than Alger Smidcap. But when comparing it to its historical volatility, Templeton Growth Fund is 1.75 times less risky than Alger Smidcap. It trades about 0.06 of its potential returns per unit of risk. Alger Smidcap Focus is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,260 in Alger Smidcap Focus on September 14, 2024 and sell it today you would earn a total of 252.00 from holding Alger Smidcap Focus or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Growth Fund vs. Alger Smidcap Focus
Performance |
| Timeline |
| Templeton Growth |
| Alger Smidcap Focus |
Templeton Growth and Alger Smidcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Growth and Alger Smidcap
The main advantage of trading using opposite Templeton Growth and Alger Smidcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Growth position performs unexpectedly, Alger Smidcap 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 Smidcap will offset losses from the drop in Alger Smidcap's long position.| Templeton Growth vs. Kentucky Tax Free Short To Medium | Templeton Growth vs. Cmg Ultra Short | Templeton Growth vs. Barings Active Short | Templeton Growth vs. Dreyfus Short Intermediate |
| Alger Smidcap vs. Bbh Intermediate Municipal | Alger Smidcap vs. Franklin High Yield | Alger Smidcap vs. The National Tax Free | Alger Smidcap vs. Touchstone Premium Yield |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |