Correlation Between Needham Aggressive and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Mainstay Epoch 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 Mainstay Epoch 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 Mainstay Epoch Equity, you can compare the effects of market volatilities on Needham Aggressive and Mainstay Epoch 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 Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Mainstay Epoch.
Diversification Opportunities for Needham Aggressive and Mainstay Epoch
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Needham and Mainstay is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Mainstay Epoch Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Equity 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 Mainstay Epoch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Epoch Equity has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Needham Aggressive and Mainstay Epoch
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 0.73 times more return on investment than Mainstay Epoch. However, Needham Aggressive Growth is 1.37 times less risky than Mainstay Epoch. It trades about 0.13 of its potential returns per unit of risk. Mainstay Epoch Equity is currently generating about -0.23 per unit of risk. If you would invest 4,934 in Needham Aggressive Growth on September 13, 2024 and sell it today you would earn a total of 180.00 from holding Needham Aggressive Growth or generate 3.65% 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. Mainstay Epoch Equity
Performance |
| Timeline |
| Needham Aggressive Growth |
| Mainstay Epoch Equity |
Needham Aggressive and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Mainstay Epoch
The main advantage of trading using opposite Needham Aggressive and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Mainstay Epoch 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 Mainstay Epoch will offset losses from the drop in Mainstay Epoch'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 |
| Mainstay Epoch vs. Mainstay Tax Free | Mainstay Epoch vs. Mainstay Large Cap | Mainstay Epoch vs. Mainstay Large Cap | Mainstay Epoch vs. Mainstay Large Cap |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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