Correlation Between Voya Index and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both Voya Index 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 Voya Index and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Index Plus and Needham Aggressive Growth, you can compare the effects of market volatilities on Voya Index 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 Voya Index with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Needham Aggressive.
Diversification Opportunities for Voya Index and Needham Aggressive
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Needham is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Plus 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 Voya Index 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 Voya Index Plus 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 Voya Index i.e., Voya Index and Needham Aggressive go up and down completely randomly.
Pair Corralation between Voya Index and Needham Aggressive
Assuming the 90 days horizon Voya Index is expected to generate 1.12 times less return on investment than Needham Aggressive. But when comparing it to its historical volatility, Voya Index Plus is 1.44 times less risky than Needham Aggressive. It trades about 0.1 of its potential returns per unit of risk. Needham Aggressive Growth is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,179 in Needham Aggressive Growth on September 4, 2024 and sell it today you would earn a total of 1,915 from holding Needham Aggressive Growth or generate 60.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Voya Index Plus vs. Needham Aggressive Growth
Performance |
| Timeline |
| Voya Index Plus |
| Needham Aggressive Growth |
Voya Index and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Needham Aggressive
The main advantage of trading using opposite Voya Index and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index 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.| Voya Index vs. Commodities Strategy Fund | Voya Index vs. T Rowe Price | Voya Index vs. Eic Value Fund | Voya Index vs. Nasdaq 100 Fund Class |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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