Correlation Between Needham Aggressive and One Choice
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and One Choice 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 One Choice 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 One Choice 2050, you can compare the effects of market volatilities on Needham Aggressive and One Choice 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 One Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and One Choice.
Diversification Opportunities for Needham Aggressive and One Choice
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Needham and One is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and One Choice 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Choice 2050 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 One Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Choice 2050 has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and One Choice go up and down completely randomly.
Pair Corralation between Needham Aggressive and One Choice
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 2.11 times more return on investment than One Choice. However, Needham Aggressive is 2.11 times more volatile than One Choice 2050. It trades about 0.26 of its potential returns per unit of risk. One Choice 2050 is currently generating about 0.13 per unit of risk. If you would invest 4,958 in Needham Aggressive Growth on October 25, 2024 and sell it today you would earn a total of 300.00 from holding Needham Aggressive Growth or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. One Choice 2050
Performance |
| Timeline |
| Needham Aggressive Growth |
| One Choice 2050 |
Needham Aggressive and One Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and One Choice
The main advantage of trading using opposite Needham Aggressive and One Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, One Choice 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 One Choice will offset losses from the drop in One Choice'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 |
| One Choice vs. Artisan High Income | One Choice vs. T Rowe Price | One Choice vs. Old Westbury Municipal | One Choice vs. Metropolitan West Porate |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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