Correlation Between Midcap Fund and Alger Midcap

Can any of the company-specific risk be diversified away by investing in both Midcap Fund and Alger Midcap 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 Midcap Fund and Alger Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Midcap Fund Class and Alger Midcap Growth, you can compare the effects of market volatilities on Midcap Fund and Alger Midcap 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 Midcap Fund with a short position of Alger Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midcap Fund and Alger Midcap.

Diversification Opportunities for Midcap Fund and Alger Midcap

-0.34

Correlation Coefficient

Midcap Fund  Alger Midcap

Very good diversification

The 3 months correlation between Midcap and Alger is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Midcap Fund Class and Alger Midcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Midcap Growth and Midcap Fund 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 Midcap Fund Class are associated (or correlated) with Alger Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Midcap Growth has no effect on the direction of Midcap Fund i.e., Midcap Fund and Alger Midcap go up and down completely randomly.

Pair Corralation between Midcap Fund and Alger Midcap

Assuming the 90 days horizon Midcap Fund Class is expected to under-perform the Alger Midcap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Midcap Fund Class is 1.33 times less risky than Alger Midcap. The mutual fund trades about -0.25 of its potential returns per unit of risk. The Alger Midcap Growth is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  1,162  in Alger Midcap Growth on July 23, 2025 and sell it today you would lose (30.00) from holding Alger Midcap Growth or give up 2.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Midcap Fund Class  vs.  Alger Midcap Growth

Midcap Fund Class

Risk-Adjusted Performance

Weakest

Over the last 90 days Midcap Fund Class has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Midcap Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alger Midcap Growth

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Midcap Growth are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Alger Midcap may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Midcap Fund and Alger Midcap

The main advantage of trading using opposite Midcap Fund and Alger Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midcap Fund position performs unexpectedly, Alger Midcap 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 Midcap will offset losses from the drop in Alger Midcap's long position.

The idea behind Midcap Fund Class and Alger Midcap Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.