Correlation Between Alger Small and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both Alger Small 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 Alger Small and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Small Cap and Needham Aggressive Growth, you can compare the effects of market volatilities on Alger Small 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 Alger Small with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Small and Needham Aggressive.
Diversification Opportunities for Alger Small and Needham Aggressive
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alger and Needham is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Alger Small Cap 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 Alger Small 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 Small Cap 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 Alger Small i.e., Alger Small and Needham Aggressive go up and down completely randomly.
Pair Corralation between Alger Small and Needham Aggressive
Assuming the 90 days horizon Alger Small is expected to generate 1.36 times less return on investment than Needham Aggressive. In addition to that, Alger Small is 1.01 times more volatile than Needham Aggressive Growth. It trades about 0.1 of its total potential returns per unit of risk. Needham Aggressive Growth is currently generating about 0.13 per unit of volatility. If you would invest 4,677 in Needham Aggressive Growth on September 13, 2024 and sell it today you would earn a total of 168.00 from holding Needham Aggressive Growth or generate 3.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Alger Small Cap vs. Needham Aggressive Growth
Performance |
| Timeline |
| Alger Small Cap |
| Needham Aggressive Growth |
Alger Small and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Small and Needham Aggressive
The main advantage of trading using opposite Alger Small and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Small 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.| Alger Small vs. Alger Midcap Growth | Alger Small vs. Templeton Growth Fund | Alger Small vs. Alger Capital Appreciation | Alger Small vs. Janus Forty Fund |
| Needham Aggressive vs. Needham Small Cap | Needham Aggressive vs. Needham Growth Fund | Needham Aggressive vs. Needham Aggressive Growth | Needham Aggressive vs. Oberweis Micro Cap 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |