Correlation Between Needham Aggressive and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Ashmore Emerging 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 Ashmore Emerging 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 Ashmore Emerging Markets, you can compare the effects of market volatilities on Needham Aggressive and Ashmore Emerging 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 Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Ashmore Emerging.
Diversification Opportunities for Needham Aggressive and Ashmore Emerging
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Needham and Ashmore is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets 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 Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Needham Aggressive and Ashmore Emerging
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 2.31 times more return on investment than Ashmore Emerging. However, Needham Aggressive is 2.31 times more volatile than Ashmore Emerging Markets. It trades about 0.29 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about -0.24 per unit of risk. If you would invest 4,629 in Needham Aggressive Growth on September 2, 2024 and sell it today you would earn a total of 465.00 from holding Needham Aggressive Growth or generate 10.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Needham Aggressive Growth |
| Ashmore Emerging Markets |
Needham Aggressive and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Ashmore Emerging
The main advantage of trading using opposite Needham Aggressive and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Ashmore Emerging 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 Ashmore Emerging will offset losses from the drop in Ashmore Emerging'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 |
| Ashmore Emerging vs. Ab Global Risk | Ashmore Emerging vs. Federated Institutional High | Ashmore Emerging vs. Lgm Risk Managed | Ashmore Emerging vs. Needham Aggressive Growth |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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