Correlation Between Jacob Internet and Needham Small
Can any of the company-specific risk be diversified away by investing in both Jacob Internet and Needham Small 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 Jacob Internet and Needham Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacob Internet Fund and Needham Small Cap, you can compare the effects of market volatilities on Jacob Internet and Needham Small 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 Jacob Internet with a short position of Needham Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacob Internet and Needham Small.
Diversification Opportunities for Jacob Internet and Needham Small
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jacob and Needham is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Jacob Internet Fund and Needham Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Small Cap and Jacob Internet 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 Jacob Internet Fund are associated (or correlated) with Needham Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Small Cap has no effect on the direction of Jacob Internet i.e., Jacob Internet and Needham Small go up and down completely randomly.
Pair Corralation between Jacob Internet and Needham Small
Assuming the 90 days horizon Jacob Internet Fund is expected to generate 1.02 times more return on investment than Needham Small. However, Jacob Internet is 1.02 times more volatile than Needham Small Cap. It trades about 0.44 of its potential returns per unit of risk. Needham Small Cap is currently generating about 0.09 per unit of risk. If you would invest 500.00 in Jacob Internet Fund on August 29, 2024 and sell it today you would earn a total of 96.00 from holding Jacob Internet Fund or generate 19.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacob Internet Fund vs. Needham Small Cap
Performance |
| Timeline |
| Jacob Internet |
| Needham Small Cap |
Jacob Internet and Needham Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacob Internet and Needham Small
The main advantage of trading using opposite Jacob Internet and Needham Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacob Internet position performs unexpectedly, Needham Small 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 Small will offset losses from the drop in Needham Small's long position.| Jacob Internet vs. Kinetics Internet Fund | Jacob Internet vs. Internet Ultrasector Profund | Jacob Internet vs. Firsthand Technology Opportunities | Jacob Internet vs. Berkshire Focus |
| Needham Small vs. Putnam Equity Income | Needham Small vs. Putnam Growth Opportunities | Needham Small vs. HUMANA INC | Needham Small vs. Aquagold International |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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