Correlation Between L Mason and Alger Capital
Can any of the company-specific risk be diversified away by investing in both L Mason 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 L Mason and Alger Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L Mason Qs and Alger Capital Appreciation, you can compare the effects of market volatilities on L Mason 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 L Mason with a short position of Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Mason and Alger Capital.
Diversification Opportunities for L Mason and Alger Capital
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LWLAX and Alger is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding L Mason Qs 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 L Mason 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 L Mason Qs 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 L Mason i.e., L Mason and Alger Capital go up and down completely randomly.
Pair Corralation between L Mason and Alger Capital
Assuming the 90 days horizon L Mason is expected to generate 5.02 times less return on investment than Alger Capital. But when comparing it to its historical volatility, L Mason Qs is 3.58 times less risky than Alger Capital. It trades about 0.25 of its potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 2,970 in Alger Capital Appreciation on May 1, 2025 and sell it today you would earn a total of 787.00 from holding Alger Capital Appreciation or generate 26.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Mason Qs vs. Alger Capital Appreciation
Performance |
| Timeline |
| L Mason Qs |
| Alger Capital Apprec |
L Mason and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Mason and Alger Capital
The main advantage of trading using opposite L Mason and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Mason 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.| L Mason vs. Invesco Energy Fund | L Mason vs. Firsthand Alternative Energy | L Mason vs. Icon Natural Resources | L Mason vs. Global Resources Fund |
| Alger Capital vs. Morningstar Growth Etf | Alger Capital vs. Upright Growth Income | Alger Capital vs. Praxis Genesis Growth | Alger Capital vs. Transamerica Capital Growth |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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