Correlation Between Fa 529 and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both Fa 529 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 Fa 529 and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fa 529 Aggressive and Needham Aggressive Growth, you can compare the effects of market volatilities on Fa 529 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 Fa 529 with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fa 529 and Needham Aggressive.
Diversification Opportunities for Fa 529 and Needham Aggressive
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FFCGX and Needham is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Fa 529 Aggressive 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 Fa 529 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 Fa 529 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 Fa 529 i.e., Fa 529 and Needham Aggressive go up and down completely randomly.
Pair Corralation between Fa 529 and Needham Aggressive
Assuming the 90 days horizon Fa 529 Aggressive is expected to under-perform the Needham Aggressive. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fa 529 Aggressive is 2.68 times less risky than Needham Aggressive. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Needham Aggressive Growth is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,981 in Needham Aggressive Growth on September 12, 2024 and sell it today you would earn a total of 170.00 from holding Needham Aggressive Growth or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fa 529 Aggressive vs. Needham Aggressive Growth
Performance |
| Timeline |
| Fa 529 Aggressive |
| Needham Aggressive Growth |
Fa 529 and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fa 529 and Needham Aggressive
The main advantage of trading using opposite Fa 529 and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fa 529 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.| Fa 529 vs. Artisan High Income | Fa 529 vs. Pace High Yield | Fa 529 vs. Multisector Bond Sma | Fa 529 vs. California Bond Fund |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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