Correlation Between Needham Aggressive and Northern Global
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Northern Global 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 Northern Global 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 Northern Global Tactical, you can compare the effects of market volatilities on Needham Aggressive and Northern Global 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 Northern Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Northern Global.
Diversification Opportunities for Needham Aggressive and Northern Global
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Needham and Northern is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Northern Global Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Global Tactical 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 Northern Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Global Tactical has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Northern Global go up and down completely randomly.
Pair Corralation between Needham Aggressive and Northern Global
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 2.79 times more return on investment than Northern Global. However, Needham Aggressive is 2.79 times more volatile than Northern Global Tactical. It trades about 0.09 of its potential returns per unit of risk. Northern Global Tactical is currently generating about 0.09 per unit of risk. If you would invest 3,034 in Needham Aggressive Growth on September 13, 2024 and sell it today you would earn a total of 2,080 from holding Needham Aggressive Growth or generate 68.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Northern Global Tactical
Performance |
| Timeline |
| Needham Aggressive Growth |
| Northern Global Tactical |
Needham Aggressive and Northern Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Northern Global
The main advantage of trading using opposite Needham Aggressive and Northern Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Northern Global 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 Northern Global will offset losses from the drop in Northern Global'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 |
| Northern Global vs. Needham Aggressive Growth | Northern Global vs. Ftfa Franklin Templeton Growth | Northern Global vs. L Abbett Growth | Northern Global vs. Pace Smallmedium Growth |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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