Correlation Between Profunds-large Cap and Alger Spectra
Can any of the company-specific risk be diversified away by investing in both Profunds-large Cap and Alger Spectra 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 Profunds-large Cap and Alger Spectra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Profunds Large Cap Growth and Alger Spectra Fund, you can compare the effects of market volatilities on Profunds-large Cap and Alger Spectra 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 Profunds-large Cap with a short position of Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profunds-large Cap and Alger Spectra.
Diversification Opportunities for Profunds-large Cap and Alger Spectra
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Profunds-large and Alger is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Profunds Large Cap Growth and Alger Spectra Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra and Profunds-large Cap 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 Profunds Large Cap Growth are associated (or correlated) with Alger Spectra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Spectra has no effect on the direction of Profunds-large Cap i.e., Profunds-large Cap and Alger Spectra go up and down completely randomly.
Pair Corralation between Profunds-large Cap and Alger Spectra
Assuming the 90 days horizon Profunds-large Cap is expected to generate 1.5 times less return on investment than Alger Spectra. But when comparing it to its historical volatility, Profunds Large Cap Growth is 1.14 times less risky than Alger Spectra. It trades about 0.12 of its potential returns per unit of risk. Alger Spectra Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,954 in Alger Spectra Fund on March 28, 2025 and sell it today you would earn a total of 481.00 from holding Alger Spectra Fund or generate 24.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Profunds Large Cap Growth vs. Alger Spectra Fund
Performance |
| Timeline |
| Profunds Large Cap |
| Alger Spectra |
Profunds-large Cap and Alger Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profunds-large Cap and Alger Spectra
The main advantage of trading using opposite Profunds-large Cap and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profunds-large Cap position performs unexpectedly, Alger Spectra 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 Spectra will offset losses from the drop in Alger Spectra's long position.| Profunds-large Cap vs. Short Real Estate | Profunds-large Cap vs. Short Real Estate | Profunds-large Cap vs. Ultrashort Mid Cap Profund | Profunds-large Cap vs. Ultrashort Mid Cap Profund |
| Alger Spectra vs. Davis Financial Fund | Alger Spectra vs. Vanguard Money Market | Alger Spectra vs. T Rowe Price | Alger Spectra vs. Elfun Government Money |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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