Correlation Between Needham Aggressive and Federated High
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Federated High 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 Federated High 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 Federated High Income, you can compare the effects of market volatilities on Needham Aggressive and Federated High 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 Federated High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Federated High.
Diversification Opportunities for Needham Aggressive and Federated High
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Needham and Federated is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Federated High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated High Income 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 Federated High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated High Income has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Federated High go up and down completely randomly.
Pair Corralation between Needham Aggressive and Federated High
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 4.84 times more return on investment than Federated High. However, Needham Aggressive is 4.84 times more volatile than Federated High Income. It trades about 0.08 of its potential returns per unit of risk. Federated High Income is currently generating about 0.11 per unit of risk. If you would invest 3,302 in Needham Aggressive Growth on September 3, 2024 and sell it today you would earn a total of 1,792 from holding Needham Aggressive Growth or generate 54.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Federated High Income
Performance |
| Timeline |
| Needham Aggressive Growth |
| Federated High Income |
Needham Aggressive and Federated High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Federated High
The main advantage of trading using opposite Needham Aggressive and Federated High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Federated High 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 Federated High will offset losses from the drop in Federated High'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 |
| Federated High vs. Gabelli Convertible And | Federated High vs. Advent Claymore Convertible | Federated High vs. Rationalpier 88 Convertible | Federated High vs. Lord Abbett Convertible |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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