| NESIX Fund | | | USD 20.23 0.20 1.00% |
The current 90-days correlation between Needham Small Cap and The Hartford Midcap is 0.85 (i.e., Very poor diversification). The correlation of Needham Small is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.
Needham Small Correlation With Market
Poor diversification
The correlation between Needham Small Cap and DJI is 0.75 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Needham Small Cap and DJI in the same portfolio, assuming nothing else is changed.
Check out
Correlation Analysis to better understand how to build diversified portfolios, which includes a position in Needham Small Cap. Also, note that the market value of any mutual fund could be closely tied with the direction of predictive economic indicators such as
signals in gross domestic product.
Correlation Matchups
Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.
High positive correlations | WFMIX | | HFMIX | | BEXIX | | MEDIX | | BEXIX | | WFMIX | | BEXIX | | HFMIX | | WFMIX | | MEDIX |
| | High negative correlations |
Risk-Adjusted IndicatorsThere is a big difference between Needham Mutual Fund performing well and Needham Small Mutual Fund doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze Needham Small's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.