Correlation Between Needham Aggressive and Nuveen Louisiana
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Nuveen Louisiana 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 Nuveen Louisiana 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 Nuveen Louisiana Municipal, you can compare the effects of market volatilities on Needham Aggressive and Nuveen Louisiana 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 Nuveen Louisiana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Nuveen Louisiana.
Diversification Opportunities for Needham Aggressive and Nuveen Louisiana
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Needham and Nuveen is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Nuveen Louisiana Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Louisiana Mun 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 Nuveen Louisiana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Louisiana Mun has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Nuveen Louisiana go up and down completely randomly.
Pair Corralation between Needham Aggressive and Nuveen Louisiana
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 9.07 times more return on investment than Nuveen Louisiana. However, Needham Aggressive is 9.07 times more volatile than Nuveen Louisiana Municipal. It trades about 0.13 of its potential returns per unit of risk. Nuveen Louisiana Municipal is currently generating about 0.43 per unit of risk. If you would invest 4,981 in Needham Aggressive Growth on September 12, 2024 and sell it today you would earn a total of 170.00 from holding Needham Aggressive Growth or generate 3.41% 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. Nuveen Louisiana Municipal
Performance |
| Timeline |
| Needham Aggressive Growth |
| Nuveen Louisiana Mun |
Needham Aggressive and Nuveen Louisiana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Nuveen Louisiana
The main advantage of trading using opposite Needham Aggressive and Nuveen Louisiana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Nuveen Louisiana 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 Nuveen Louisiana will offset losses from the drop in Nuveen Louisiana's long position.| Needham Aggressive vs. Needham Aggressive Growth | Needham Aggressive vs. Ultramid Cap Profund Ultramid Cap | Needham Aggressive vs. HUMANA INC | Needham Aggressive vs. Barloworld Ltd ADR |
| Nuveen Louisiana vs. Needham Aggressive Growth | Nuveen Louisiana vs. Champlain Mid Cap | Nuveen Louisiana vs. Qs Moderate Growth | Nuveen Louisiana vs. Franklin Growth Opportunities |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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