Correlation Between Dana Large and Needham Growth
Can any of the company-specific risk be diversified away by investing in both Dana Large and Needham Growth 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 Dana Large and Needham Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Large Cap and Needham Growth, you can compare the effects of market volatilities on Dana Large and Needham Growth 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 Dana Large with a short position of Needham Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Needham Growth.
Diversification Opportunities for Dana Large and Needham Growth
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dana and Needham is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Needham Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Growth and Dana Large 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 Dana Large Cap are associated (or correlated) with Needham Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Growth has no effect on the direction of Dana Large i.e., Dana Large and Needham Growth go up and down completely randomly.
Pair Corralation between Dana Large and Needham Growth
Assuming the 90 days horizon Dana Large Cap is expected to generate 0.3 times more return on investment than Needham Growth. However, Dana Large Cap is 3.39 times less risky than Needham Growth. It trades about 0.09 of its potential returns per unit of risk. Needham Growth is currently generating about -0.01 per unit of risk. If you would invest 2,695 in Dana Large Cap on September 13, 2024 and sell it today you would earn a total of 27.00 from holding Dana Large Cap or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dana Large Cap vs. Needham Growth
Performance |
| Timeline |
| Dana Large Cap |
| Needham Growth |
Dana Large and Needham Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and Needham Growth
The main advantage of trading using opposite Dana Large and Needham Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large position performs unexpectedly, Needham Growth 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 Growth will offset losses from the drop in Needham Growth's long position.| Dana Large vs. Mid Cap Growth | Dana Large vs. Franklin Growth Opportunities | Dana Large vs. Needham Aggressive Growth | Dana Large vs. Tfa Alphagen Growth |
| Needham Growth vs. Needham Aggressive Growth | Needham Growth vs. Needham Aggressive Growth | Needham Growth vs. Needham Growth Fund | Needham Growth vs. Needham Small Cap |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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