Correlation Between Needham Aggressive and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Aqr Large 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 Aqr Large 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 Aqr Large Cap, you can compare the effects of market volatilities on Needham Aggressive and Aqr Large 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 Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Aqr Large.
Diversification Opportunities for Needham Aggressive and Aqr Large
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Needham and Aqr is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap 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 Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Aqr Large go up and down completely randomly.
Pair Corralation between Needham Aggressive and Aqr Large
Assuming the 90 days horizon Needham Aggressive is expected to generate 1.16 times less return on investment than Aqr Large. In addition to that, Needham Aggressive is 1.62 times more volatile than Aqr Large Cap. It trades about 0.13 of its total potential returns per unit of risk. Aqr Large Cap is currently generating about 0.24 per unit of volatility. If you would invest 2,431 in Aqr Large Cap on August 25, 2024 and sell it today you would earn a total of 137.00 from holding Aqr Large Cap or generate 5.64% 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. Aqr Large Cap
Performance |
| Timeline |
| Needham Aggressive Growth |
| Aqr Large Cap |
Needham Aggressive and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Aqr Large
The main advantage of trading using opposite Needham Aggressive and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large's long position.| 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 |
| Aqr Large vs. Western Asset High | Aqr Large vs. Siit High Yield | Aqr Large vs. Needham Aggressive Growth | Aqr Large vs. Victory High Income |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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