Correlation Between Needham Aggressive and Oberweis Emerging
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Oberweis Emerging 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 Oberweis Emerging 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 Oberweis Emerging Growth, you can compare the effects of market volatilities on Needham Aggressive and Oberweis Emerging 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 Oberweis Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Oberweis Emerging.
Diversification Opportunities for Needham Aggressive and Oberweis Emerging
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Needham and Oberweis is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Oberweis Emerging Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Emerging Growth 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 Oberweis Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis Emerging Growth has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Oberweis Emerging go up and down completely randomly.
Pair Corralation between Needham Aggressive and Oberweis Emerging
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 1.16 times more return on investment than Oberweis Emerging. However, Needham Aggressive is 1.16 times more volatile than Oberweis Emerging Growth. It trades about 0.08 of its potential returns per unit of risk. Oberweis Emerging Growth is currently generating about 0.03 per unit of risk. If you would invest 2,982 in Needham Aggressive Growth on August 30, 2024 and sell it today you would earn a total of 1,815 from holding Needham Aggressive Growth or generate 60.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Oberweis Emerging Growth
Performance |
| Timeline |
| Needham Aggressive Growth |
| Oberweis Emerging Growth |
Needham Aggressive and Oberweis Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Oberweis Emerging
The main advantage of trading using opposite Needham Aggressive and Oberweis Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Oberweis Emerging 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 Oberweis Emerging will offset losses from the drop in Oberweis Emerging's long position.| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |