Correlation Between Jacob Micro and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both Jacob Micro 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 Jacob Micro and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacob Micro Cap and Needham Aggressive Growth, you can compare the effects of market volatilities on Jacob Micro 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 Jacob Micro with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacob Micro and Needham Aggressive.
Diversification Opportunities for Jacob Micro and Needham Aggressive
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jacob and Needham is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Jacob Micro Cap 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 Jacob Micro 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 Micro Cap 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 Jacob Micro i.e., Jacob Micro and Needham Aggressive go up and down completely randomly.
Pair Corralation between Jacob Micro and Needham Aggressive
Assuming the 90 days horizon Jacob Micro Cap is expected to generate 0.84 times more return on investment than Needham Aggressive. However, Jacob Micro Cap is 1.19 times less risky than Needham Aggressive. It trades about 0.26 of its potential returns per unit of risk. Needham Aggressive Growth is currently generating about 0.12 per unit of risk. If you would invest 2,194 in Jacob Micro Cap on August 26, 2024 and sell it today you would earn a total of 188.00 from holding Jacob Micro Cap or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacob Micro Cap vs. Needham Aggressive Growth
Performance |
| Timeline |
| Jacob Micro Cap |
| Needham Aggressive Growth |
Jacob Micro and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacob Micro and Needham Aggressive
The main advantage of trading using opposite Jacob Micro and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacob Micro 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.| Jacob Micro vs. Small Pany Growth | Jacob Micro vs. Jacob Internet Fund | Jacob Micro vs. Jacob Small Cap | Jacob Micro vs. Amer Beacon Ark |
| 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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