Correlation Between Needham Aggressive and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Franklin 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 Franklin 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 Franklin Growth Opportunities, you can compare the effects of market volatilities on Needham Aggressive and Franklin 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 Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Franklin Growth.
Diversification Opportunities for Needham Aggressive and Franklin Growth
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Needham and Franklin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo 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 Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Oppo has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Franklin Growth go up and down completely randomly.
Pair Corralation between Needham Aggressive and Franklin Growth
Assuming the 90 days horizon Needham Aggressive is expected to generate 1.72 times less return on investment than Franklin Growth. In addition to that, Needham Aggressive is 1.31 times more volatile than Franklin Growth Opportunities. It trades about 0.06 of its total potential returns per unit of risk. Franklin Growth Opportunities is currently generating about 0.14 per unit of volatility. If you would invest 4,192 in Franklin Growth Opportunities on November 3, 2024 and sell it today you would earn a total of 859.00 from holding Franklin Growth Opportunities or generate 20.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Franklin Growth Opportunities
Performance |
| Timeline |
| Needham Aggressive Growth |
| Franklin Growth Oppo |
Needham Aggressive and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Franklin Growth
The main advantage of trading using opposite Needham Aggressive and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Franklin 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 Franklin Growth will offset losses from the drop in Franklin 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 |
| Franklin Growth vs. Rbb Fund | Franklin Growth vs. L Abbett Growth | Franklin Growth vs. Fm Investments Large | Franklin Growth vs. Qs Global Equity |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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