Correlation Between Baron Opportunity and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both Baron Opportunity 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 Baron Opportunity and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Opportunity Fund and Needham Aggressive Growth, you can compare the effects of market volatilities on Baron Opportunity 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 Baron Opportunity with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Opportunity and Needham Aggressive.
Diversification Opportunities for Baron Opportunity and Needham Aggressive
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Baron and Needham is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Baron Opportunity Fund 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 Baron Opportunity 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 Baron Opportunity Fund 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 Baron Opportunity i.e., Baron Opportunity and Needham Aggressive go up and down completely randomly.
Pair Corralation between Baron Opportunity and Needham Aggressive
Assuming the 90 days horizon Baron Opportunity Fund is expected to generate 0.93 times more return on investment than Needham Aggressive. However, Baron Opportunity Fund is 1.08 times less risky than Needham Aggressive. It trades about 0.12 of its potential returns per unit of risk. Needham Aggressive Growth is currently generating about 0.07 per unit of risk. If you would invest 3,346 in Baron Opportunity Fund on August 26, 2024 and sell it today you would earn a total of 1,489 from holding Baron Opportunity Fund or generate 44.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Opportunity Fund vs. Needham Aggressive Growth
Performance |
| Timeline |
| Baron Opportunity |
| Needham Aggressive Growth |
Baron Opportunity and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Opportunity and Needham Aggressive
The main advantage of trading using opposite Baron Opportunity and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Opportunity 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.| Baron Opportunity vs. Baron Partners Fund | Baron Opportunity vs. Baron Global Advantage | Baron Opportunity vs. Baron Fifth Avenue | Baron Opportunity vs. Baron Focused Growth |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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