Correlation Between Alger Balanced and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Alger Balanced 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 Balanced 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 Balanced Portfolio and Alger Capital Appreciation, you can compare the effects of market volatilities on Alger Balanced 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 Balanced with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Balanced and Alger Capital.
Diversification Opportunities for Alger Balanced and Alger Capital
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alger and Alger is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Alger Balanced Portfolio 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 Balanced 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 Balanced Portfolio 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 Balanced i.e., Alger Balanced and Alger Capital go up and down completely randomly.
Pair Corralation between Alger Balanced and Alger Capital
Assuming the 90 days horizon Alger Balanced is expected to generate 3.65 times less return on investment than Alger Capital. But when comparing it to its historical volatility, Alger Balanced Portfolio is 1.96 times less risky than Alger Capital. It trades about 0.08 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 10,266 in Alger Capital Appreciation on March 28, 2025 and sell it today you would earn a total of 2,539 from holding Alger Capital Appreciation or generate 24.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Alger Balanced Portfolio vs. Alger Capital Appreciation
Performance |
| Timeline |
| Alger Balanced Portfolio |
| Alger Capital Apprec |
Alger Balanced and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Balanced and Alger Capital
The main advantage of trading using opposite Alger Balanced and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Balanced 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 Balanced vs. Alger Large Cap | Alger Balanced vs. Alger Growth Income | Alger Balanced vs. Select Fund C | Alger Balanced vs. Alger Capital Appreciation |
| Alger Capital vs. Sa Worldwide Moderate | Alger Capital vs. College Retirement Equities | Alger Capital vs. Moderate Balanced Allocation | Alger Capital vs. American Funds Retirement |
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.
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