Correlation Between Needham Aggressive and Alliancebernstein
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Alliancebernstein 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 Alliancebernstein 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 Alliancebernstein Global High, you can compare the effects of market volatilities on Needham Aggressive and Alliancebernstein 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 Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Alliancebernstein.
Diversification Opportunities for Needham Aggressive and Alliancebernstein
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Needham and Alliancebernstein is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein 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 Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Alliancebernstein go up and down completely randomly.
Pair Corralation between Needham Aggressive and Alliancebernstein
Assuming the 90 days horizon Needham Aggressive is expected to generate 2.61 times less return on investment than Alliancebernstein. In addition to that, Needham Aggressive is 3.31 times more volatile than Alliancebernstein Global High. It trades about 0.01 of its total potential returns per unit of risk. Alliancebernstein Global High is currently generating about 0.11 per unit of volatility. If you would invest 1,030 in Alliancebernstein Global High on August 29, 2024 and sell it today you would earn a total of 67.00 from holding Alliancebernstein Global High or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Alliancebernstein Global High
Performance |
| Timeline |
| Needham Aggressive Growth |
| Alliancebernstein |
Needham Aggressive and Alliancebernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Alliancebernstein
The main advantage of trading using opposite Needham Aggressive and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Alliancebernstein 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 Alliancebernstein will offset losses from the drop in Alliancebernstein's long position.| Needham Aggressive vs. Putnam Equity Income | Needham Aggressive vs. Putnam Growth Opportunities | Needham Aggressive vs. HUMANA INC | Needham Aggressive vs. Aquagold International |
| Alliancebernstein vs. Gabelli Global Small | Alliancebernstein vs. MFS Investment Grade | Alliancebernstein vs. Eaton Vance National | Alliancebernstein vs. GAMCO Natural Resources |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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