Correlation Between Alger Large and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Alger Large 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 Alger Large and Alger Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Large Cap and Alger Capital Appreciation, you can compare the effects of market volatilities on Alger Large 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 Alger Large with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Large and Alger Capital.
Diversification Opportunities for Alger Large and Alger Capital
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alger and Alger is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Alger Large Cap 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 Alger Large 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 Alger Large Cap 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 Alger Large i.e., Alger Large and Alger Capital go up and down completely randomly.
Pair Corralation between Alger Large and Alger Capital
Assuming the 90 days horizon Alger Large Cap is expected to generate 1.13 times more return on investment than Alger Capital. However, Alger Large is 1.13 times more volatile than Alger Capital Appreciation. It trades about 0.25 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.23 per unit of risk. If you would invest 9,569 in Alger Large Cap on June 12, 2025 and sell it today you would earn a total of 1,974 from holding Alger Large Cap or generate 20.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Large Cap vs. Alger Capital Appreciation
Performance |
| Timeline |
| Alger Large Cap |
| Alger Capital Apprec |
Alger Large and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Large and Alger Capital
The main advantage of trading using opposite Alger Large and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Large 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.| Alger Large vs. Alternative Asset Allocation | Alger Large vs. Semiconductor Ultrasector Profund | Alger Large vs. Lord Abbett Diversified | Alger Large vs. Nasdaq 100 Fund Class |
| Alger Capital vs. Thrivent Diversified Income | Alger Capital vs. Stone Ridge Diversified | Alger Capital vs. Guidepath Conservative Income | Alger Capital vs. Elfun Diversified 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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