Correlation Between Alger Capital and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Alger Capital and Dow Jones 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 Capital and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Capital Appreciation and Dow Jones Industrial, you can compare the effects of market volatilities on Alger Capital and Dow Jones 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 Capital with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Capital and Dow Jones.
Diversification Opportunities for Alger Capital and Dow Jones
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alger and Dow is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Alger Capital Appreciation and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Alger Capital 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 Capital Appreciation are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Alger Capital i.e., Alger Capital and Dow Jones go up and down completely randomly.
Pair Corralation between Alger Capital and Dow Jones
Assuming the 90 days horizon Alger Capital Appreciation is expected to generate 1.48 times more return on investment than Dow Jones. However, Alger Capital is 1.48 times more volatile than Dow Jones Industrial. It trades about 0.13 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.01 per unit of risk. If you would invest 7,408 in Alger Capital Appreciation on March 26, 2025 and sell it today you would earn a total of 1,460 from holding Alger Capital Appreciation or generate 19.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Capital Appreciation vs. Dow Jones Industrial
Performance |
| Timeline |
Alger Capital and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Alger Capital Appreciation
Pair trading matchups for Alger Capital
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Alger Capital and Dow Jones
The main advantage of trading using opposite Alger Capital and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Capital position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Alger Capital vs. Alger Midcap Growth | Alger Capital vs. Blackrock Basic Value | Alger Capital vs. Invesco Growth And | Alger Capital vs. Kinetics Market Opportunities |
| Dow Jones vs. Eldorado Gold Corp | Dow Jones vs. Denison Mines Corp | Dow Jones vs. Weyco Group | Dow Jones vs. Timken Company |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |