Correlation Between Needham Aggressive and Aberdeen
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Aberdeen 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 Needham Aggressive and Aberdeen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Needham Aggressive Growth and Aberdeen Eq Long Short, you can compare the effects of market volatilities on Needham Aggressive and Aberdeen 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 Needham Aggressive with a short position of Aberdeen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Aberdeen.
Diversification Opportunities for Needham Aggressive and Aberdeen
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Needham and Aberdeen is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Aberdeen Eq Long Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Eq Long and Needham Aggressive 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 Needham Aggressive Growth are associated (or correlated) with Aberdeen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Eq Long has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Aberdeen go up and down completely randomly.
Pair Corralation between Needham Aggressive and Aberdeen
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 1.15 times more return on investment than Aberdeen. However, Needham Aggressive is 1.15 times more volatile than Aberdeen Eq Long Short. It trades about 0.09 of its potential returns per unit of risk. Aberdeen Eq Long Short is currently generating about 0.08 per unit of risk. If you would invest 3,121 in Needham Aggressive Growth on August 29, 2024 and sell it today you would earn a total of 1,676 from holding Needham Aggressive Growth or generate 53.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Aberdeen Eq Long Short
Performance |
| Timeline |
| Needham Aggressive Growth |
| Aberdeen Eq Long |
Needham Aggressive and Aberdeen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Aberdeen
The main advantage of trading using opposite Needham Aggressive and Aberdeen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Aberdeen 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 Aberdeen will offset losses from the drop in Aberdeen's long position.| Needham Aggressive vs. Needham Growth Fund | Needham Aggressive vs. Baron Opportunity Fund | Needham Aggressive vs. Jacob Micro Cap | Needham Aggressive vs. Intrepid Endurance Fund |
| Aberdeen vs. Needham Aggressive Growth | Aberdeen vs. Aquagold International | Aberdeen vs. Morningstar Unconstrained Allocation | Aberdeen vs. Thrivent High Yield |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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