Correlation Between Alger Funds and Alger Balanced
Can any of the company-specific risk be diversified away by investing in both Alger Funds and Alger Balanced 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 Funds and Alger Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Alger Funds and Alger Balanced Portfolio, you can compare the effects of market volatilities on Alger Funds and Alger Balanced 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 Funds with a short position of Alger Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Funds and Alger Balanced.
Diversification Opportunities for Alger Funds and Alger Balanced
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 The Alger Funds and Alger Balanced Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Balanced Portfolio and Alger Funds 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 The Alger Funds are associated (or correlated) with Alger Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Balanced Portfolio has no effect on the direction of Alger Funds i.e., Alger Funds and Alger Balanced go up and down completely randomly.
Pair Corralation between Alger Funds and Alger Balanced
Assuming the 90 days horizon The Alger Funds is expected to generate 1.9 times more return on investment than Alger Balanced. However, Alger Funds is 1.9 times more volatile than Alger Balanced Portfolio. It trades about 0.06 of its potential returns per unit of risk. Alger Balanced Portfolio is currently generating about 0.05 per unit of risk. If you would invest 950.00 in The Alger Funds on March 21, 2025 and sell it today you would earn a total of 67.00 from holding The Alger Funds or generate 7.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
The Alger Funds vs. Alger Balanced Portfolio
Performance |
| Timeline |
| Alger Funds |
| Alger Balanced Portfolio |
Alger Funds and Alger Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Funds and Alger Balanced
The main advantage of trading using opposite Alger Funds and Alger Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Funds position performs unexpectedly, Alger Balanced 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 Balanced will offset losses from the drop in Alger Balanced's long position.| Alger Funds vs. Blackrock Financial Institutions | Alger Funds vs. Financial Industries Fund | Alger Funds vs. Putnam Global Financials | Alger Funds vs. Goldman Sachs Financial |
| Alger Balanced vs. Alger Large Cap | Alger Balanced vs. Alger Growth Income | Alger Balanced vs. Select Fund C | Alger Balanced vs. Alger Capital Appreciation |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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