Correlation Between Clearbridge Small and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both Clearbridge Small 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 Clearbridge Small and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Small Cap and Needham Aggressive Growth, you can compare the effects of market volatilities on Clearbridge Small 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 Clearbridge Small with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Small and Needham Aggressive.
Diversification Opportunities for Clearbridge Small and Needham Aggressive
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clearbridge and Needham is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Small 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 Clearbridge Small 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 Clearbridge Small 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 Clearbridge Small i.e., Clearbridge Small and Needham Aggressive go up and down completely randomly.
Pair Corralation between Clearbridge Small and Needham Aggressive
Assuming the 90 days horizon Clearbridge Small is expected to generate 1.66 times less return on investment than Needham Aggressive. But when comparing it to its historical volatility, Clearbridge Small Cap is 1.14 times less risky than Needham Aggressive. It trades about 0.05 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 |
Clearbridge Small Cap vs. Needham Aggressive Growth
Performance |
| Timeline |
| Clearbridge Small Cap |
| Needham Aggressive Growth |
Clearbridge Small and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Small and Needham Aggressive
The main advantage of trading using opposite Clearbridge Small and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Small 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.| Clearbridge Small vs. Tax Managed Mid Small | Clearbridge Small vs. Small Cap Value | Clearbridge Small vs. Small Midcap Dividend Income | Clearbridge Small vs. The Hartford Small |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |