Correlation Between Needham Aggressive and Federated Max-cap
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Federated Max-cap 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 Max-cap 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 Max Cap Index, you can compare the effects of market volatilities on Needham Aggressive and Federated Max-cap 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 Max-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Federated Max-cap.
Diversification Opportunities for Needham Aggressive and Federated Max-cap
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Needham and Federated is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Federated Max Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Max Cap 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 Max-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Max Cap has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Federated Max-cap go up and down completely randomly.
Pair Corralation between Needham Aggressive and Federated Max-cap
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 2.19 times more return on investment than Federated Max-cap. However, Needham Aggressive is 2.19 times more volatile than Federated Max Cap Index. It trades about 0.31 of its potential returns per unit of risk. Federated Max Cap Index is currently generating about 0.37 per unit of risk. If you would invest 4,624 in Needham Aggressive Growth on September 4, 2024 and sell it today you would earn a total of 470.00 from holding Needham Aggressive Growth or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Federated Max Cap Index
Performance |
| Timeline |
| Needham Aggressive Growth |
| Federated Max Cap |
Needham Aggressive and Federated Max-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Federated Max-cap
The main advantage of trading using opposite Needham Aggressive and Federated Max-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Federated Max-cap 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 Max-cap will offset losses from the drop in Federated Max-cap'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 Max-cap vs. Limited Term Tax | Federated Max-cap vs. T Rowe Price | Federated Max-cap vs. Bbh Intermediate Municipal | Federated Max-cap vs. Cs 607 Tax |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |