Correlation Between Alger Spectra and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Alger Spectra 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 Spectra 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 Spectra Fund and Alger Capital Appreciation, you can compare the effects of market volatilities on Alger Spectra 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 Spectra with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Spectra and Alger Capital.
Diversification Opportunities for Alger Spectra and Alger Capital
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alger and Alger is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Alger Spectra Fund 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 Spectra 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 Spectra Fund 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 Spectra i.e., Alger Spectra and Alger Capital go up and down completely randomly.
Pair Corralation between Alger Spectra and Alger Capital
Assuming the 90 days horizon Alger Spectra is expected to generate 1.07 times less return on investment than Alger Capital. But when comparing it to its historical volatility, Alger Spectra Fund is 1.01 times less risky than Alger Capital. It trades about 0.2 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,709 in Alger Capital Appreciation on April 3, 2025 and sell it today you would earn a total of 937.00 from holding Alger Capital Appreciation or generate 34.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Spectra Fund vs. Alger Capital Appreciation
Performance |
| Timeline |
| Alger Spectra |
| Alger Capital Apprec |
Alger Spectra and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Spectra and Alger Capital
The main advantage of trading using opposite Alger Spectra and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Spectra 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 Spectra vs. Foundry Partners Fundamental | Alger Spectra vs. Fidelity Small Cap | Alger Spectra vs. Pace Smallmedium Value | Alger Spectra vs. Hennessy Nerstone Mid |
| Alger Capital vs. Templeton Developing Markets | Alger Capital vs. Jpmorgan Emerging Markets | Alger Capital vs. Ab All Market | Alger Capital vs. Pace International Emerging |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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