Correlation Between Alger Midcap and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Alger Midcap and Eaton Vance 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 Midcap and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Midcap Growth and Eaton Vance Atlanta, you can compare the effects of market volatilities on Alger Midcap and Eaton Vance 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 Midcap with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Midcap and Eaton Vance.
Diversification Opportunities for Alger Midcap and Eaton Vance
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alger and Eaton is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Alger Midcap Growth and Eaton Vance Atlanta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Atlanta and Alger Midcap 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 Midcap Growth are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Atlanta has no effect on the direction of Alger Midcap i.e., Alger Midcap and Eaton Vance go up and down completely randomly.
Pair Corralation between Alger Midcap and Eaton Vance
Assuming the 90 days horizon Alger Midcap is expected to generate 1.19 times less return on investment than Eaton Vance. In addition to that, Alger Midcap is 1.32 times more volatile than Eaton Vance Atlanta. It trades about 0.02 of its total potential returns per unit of risk. Eaton Vance Atlanta is currently generating about 0.04 per unit of volatility. If you would invest 2,765 in Eaton Vance Atlanta on January 20, 2024 and sell it today you would earn a total of 491.00 from holding Eaton Vance Atlanta or generate 17.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alger Midcap Growth vs. Eaton Vance Atlanta
Performance |
| Timeline |
| Alger Midcap Growth |
| Eaton Vance Atlanta |
Alger Midcap and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Midcap and Eaton Vance
The main advantage of trading using opposite Alger Midcap and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Midcap position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| Alger Midcap vs. Alger Small Cap | Alger Midcap vs. Alger Small Cap | Alger Midcap vs. Alger Global Growth | Alger Midcap vs. Alger Large Cap |
| Eaton Vance vs. Eaton Vance Msschsts | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance Municipal |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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