Correlation Between Strategic Allocation: and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both Strategic Allocation: and Needham Aggressive 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 Strategic Allocation: and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Allocation Aggressive and Needham Aggressive Growth, you can compare the effects of market volatilities on Strategic Allocation: and Needham Aggressive 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 Strategic Allocation: with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Allocation: and Needham Aggressive.
Diversification Opportunities for Strategic Allocation: and Needham Aggressive
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between STRATEGIC and Needham is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Allocation Aggressiv and Needham Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Aggressive Growth and Strategic Allocation: 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 Strategic Allocation Aggressive are associated (or correlated) with Needham Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Aggressive Growth has no effect on the direction of Strategic Allocation: i.e., Strategic Allocation: and Needham Aggressive go up and down completely randomly.
Pair Corralation between Strategic Allocation: and Needham Aggressive
Assuming the 90 days horizon Strategic Allocation: is expected to generate 1.44 times less return on investment than Needham Aggressive. But when comparing it to its historical volatility, Strategic Allocation Aggressive is 2.53 times less risky than Needham Aggressive. It trades about 0.18 of its potential returns per unit of risk. Needham Aggressive Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,695 in Needham Aggressive Growth on September 2, 2024 and sell it today you would earn a total of 399.00 from holding Needham Aggressive Growth or generate 8.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Allocation Aggressiv vs. Needham Aggressive Growth
Performance |
| Timeline |
| Strategic Allocation: |
| Needham Aggressive Growth |
Strategic Allocation: and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Allocation: and Needham Aggressive
The main advantage of trading using opposite Strategic Allocation: and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Allocation: position performs unexpectedly, Needham Aggressive 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 Needham Aggressive will offset losses from the drop in Needham Aggressive's long position.| Strategic Allocation: vs. Mid Cap Value | Strategic Allocation: vs. Equity Growth Fund | Strategic Allocation: vs. Income Growth Fund | Strategic Allocation: vs. Diversified Bond Fund |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |