Correlation Between Needham Aggressive and Baron Select
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Baron Select 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 Baron Select 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 Baron Select Funds, you can compare the effects of market volatilities on Needham Aggressive and Baron Select 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 Baron Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Baron Select.
Diversification Opportunities for Needham Aggressive and Baron Select
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Needham and Baron is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Baron Select Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Select Funds 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 Baron Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Select Funds has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Baron Select go up and down completely randomly.
Pair Corralation between Needham Aggressive and Baron Select
Assuming the 90 days horizon Needham Aggressive is expected to generate 1.81 times less return on investment than Baron Select. But when comparing it to its historical volatility, Needham Aggressive Growth is 1.02 times less risky than Baron Select. It trades about 0.07 of its potential returns per unit of risk. Baron Select Funds is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 786.00 in Baron Select Funds on September 4, 2024 and sell it today you would earn a total of 532.00 from holding Baron Select Funds or generate 67.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.66% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Baron Select Funds
Performance |
| Timeline |
| Needham Aggressive Growth |
| Baron Select Funds |
Needham Aggressive and Baron Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Baron Select
The main advantage of trading using opposite Needham Aggressive and Baron Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Baron Select 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 Baron Select will offset losses from the drop in Baron Select'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 |
| Baron Select vs. Dreyfus Technology Growth | Baron Select vs. Blackrock Science Technology | Baron Select vs. Dreyfus Technology Growth | Baron Select vs. Janus Global Technology |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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