Correlation Between Vaughan Nelson and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both Vaughan Nelson 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 Vaughan Nelson and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vaughan Nelson International and Needham Aggressive Growth, you can compare the effects of market volatilities on Vaughan Nelson 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 Vaughan Nelson with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaughan Nelson and Needham Aggressive.
Diversification Opportunities for Vaughan Nelson and Needham Aggressive
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vaughan and Needham is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Vaughan Nelson International 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 Vaughan Nelson 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 Vaughan Nelson International 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 Vaughan Nelson i.e., Vaughan Nelson and Needham Aggressive go up and down completely randomly.
Pair Corralation between Vaughan Nelson and Needham Aggressive
Assuming the 90 days horizon Vaughan Nelson International is expected to under-perform the Needham Aggressive. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vaughan Nelson International is 1.3 times less risky than Needham Aggressive. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Needham Aggressive Growth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,943 in Needham Aggressive Growth on September 13, 2024 and sell it today you would earn a total of 237.00 from holding Needham Aggressive Growth or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Vaughan Nelson International vs. Needham Aggressive Growth
Performance |
| Timeline |
| Vaughan Nelson Inter |
| Needham Aggressive Growth |
Vaughan Nelson and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vaughan Nelson and Needham Aggressive
The main advantage of trading using opposite Vaughan Nelson and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vaughan Nelson 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.| Vaughan Nelson vs. Advisory Research Emerging | Vaughan Nelson vs. Advisory Research International | Vaughan Nelson vs. Vaughan Nelson Emerging | Vaughan Nelson vs. Nuveen Santa Barbara |
| Needham Aggressive vs. Needham Aggressive Growth | Needham Aggressive vs. Needham Small Cap | Needham Aggressive vs. Ultramid Cap Profund Ultramid Cap | Needham Aggressive vs. Fidelity Advisor Semiconductors |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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