Correlation Between Needham Aggressive and Chestnut Street
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Chestnut Street 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 Chestnut Street 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 Chestnut Street Exchange, you can compare the effects of market volatilities on Needham Aggressive and Chestnut Street 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 Chestnut Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Chestnut Street.
Diversification Opportunities for Needham Aggressive and Chestnut Street
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Needham and Chestnut is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Chestnut Street Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chestnut Street Exchange 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 Chestnut Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chestnut Street Exchange has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Chestnut Street go up and down completely randomly.
Pair Corralation between Needham Aggressive and Chestnut Street
Assuming the 90 days horizon Needham Aggressive Growth is expected to under-perform the Chestnut Street. In addition to that, Needham Aggressive is 2.6 times more volatile than Chestnut Street Exchange. It trades about -0.23 of its total potential returns per unit of risk. Chestnut Street Exchange is currently generating about 0.03 per unit of volatility. If you would invest 117,061 in Chestnut Street Exchange on December 4, 2024 and sell it today you would earn a total of 495.00 from holding Chestnut Street Exchange or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Chestnut Street Exchange
Performance |
| Timeline |
| Needham Aggressive Growth |
| Chestnut Street Exchange |
Needham Aggressive and Chestnut Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Chestnut Street
The main advantage of trading using opposite Needham Aggressive and Chestnut Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Chestnut Street 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 Chestnut Street will offset losses from the drop in Chestnut Street'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 |
| Chestnut Street vs. Fidelity Advisor Diversified | Chestnut Street vs. Jhancock Diversified Macro | Chestnut Street vs. Lord Abbett Diversified | Chestnut Street vs. American Century Diversified |
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 CEOs Directory module to screen CEOs from public companies around the world.
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