Correlation Between Needham Aggressive and Brown Capital
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Brown Capital 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 Brown Capital 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 The Brown Capital, you can compare the effects of market volatilities on Needham Aggressive and Brown Capital 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 Brown Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Brown Capital.
Diversification Opportunities for Needham Aggressive and Brown Capital
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Needham and Brown is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and The Brown Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Capital 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 Brown Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Capital has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Brown Capital go up and down completely randomly.
Pair Corralation between Needham Aggressive and Brown Capital
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 1.18 times more return on investment than Brown Capital. However, Needham Aggressive is 1.18 times more volatile than The Brown Capital. It trades about 0.09 of its potential returns per unit of risk. The Brown Capital is currently generating about 0.05 per unit of risk. If you would invest 3,019 in Needham Aggressive Growth on September 14, 2024 and sell it today you would earn a total of 2,161 from holding Needham Aggressive Growth or generate 71.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.51% |
| Values | Daily Returns |
Needham Aggressive Growth vs. The Brown Capital
Performance |
| Timeline |
| Needham Aggressive Growth |
| Brown Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Needham Aggressive and Brown Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Brown Capital
The main advantage of trading using opposite Needham Aggressive and Brown Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Brown Capital 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 Brown Capital will offset losses from the drop in Brown Capital'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 |
| Brown Capital vs. Pace High Yield | Brown Capital vs. City National Rochdale | Brown Capital vs. Janus High Yield Fund | Brown Capital vs. Fidelity Capital 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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