Correlation Between Needham Aggressive and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Europacific Growth 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 Europacific Growth 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 Europacific Growth Fund, you can compare the effects of market volatilities on Needham Aggressive and Europacific Growth 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 Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Europacific Growth.
Diversification Opportunities for Needham Aggressive and Europacific Growth
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Needham and Europacific is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth 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 Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Europacific Growth go up and down completely randomly.
Pair Corralation between Needham Aggressive and Europacific Growth
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 2.31 times more return on investment than Europacific Growth. However, Needham Aggressive is 2.31 times more volatile than Europacific Growth Fund. It trades about 0.27 of its potential returns per unit of risk. Europacific Growth Fund is currently generating about 0.22 per unit of risk. If you would invest 4,784 in Needham Aggressive Growth on September 15, 2024 and sell it today you would earn a total of 343.00 from holding Needham Aggressive Growth or generate 7.17% 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. Europacific Growth Fund
Performance |
| Timeline |
| Needham Aggressive Growth |
| Europacific Growth |
Needham Aggressive and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Europacific Growth
The main advantage of trading using opposite Needham Aggressive and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Europacific Growth 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 Europacific Growth will offset losses from the drop in Europacific Growth'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 |
| Europacific Growth vs. Income Fund Of | Europacific Growth vs. New World Fund | Europacific Growth vs. American Mutual Fund | Europacific Growth vs. American Mutual Fund |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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