Correlation Between Needham Aggressive and Franklin New
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Franklin New 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 New 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 New York, you can compare the effects of market volatilities on Needham Aggressive and Franklin New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Franklin New.
Diversification Opportunities for Needham Aggressive and Franklin New
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Needham and Franklin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Franklin New go up and down completely randomly.
Pair Corralation between Needham Aggressive and Franklin New
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 6.05 times more return on investment than Franklin New. However, Needham Aggressive is 6.05 times more volatile than Franklin New York. It trades about 0.06 of its potential returns per unit of risk. Franklin New York is currently generating about 0.06 per unit of risk. If you would invest 4,222 in Needham Aggressive Growth on September 14, 2024 and sell it today you would earn a total of 958.00 from holding Needham Aggressive Growth or generate 22.69% 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. Franklin New York
Performance |
| Timeline |
| Needham Aggressive Growth |
| Franklin New York |
Needham Aggressive and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Franklin New
The main advantage of trading using opposite Needham Aggressive and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Franklin New 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 New will offset losses from the drop in Franklin New'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 New vs. Franklin Federal Limited Term | Franklin New vs. Delaware Investments Ultrashort | Franklin New vs. Angel Oak Ultrashort | Franklin New vs. Boston Partners Longshort |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |