Correlation Between Needham Aggressive and Aggressive Allocation
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Aggressive Allocation 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 Aggressive Allocation 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 Aggressive Allocation Fund, you can compare the effects of market volatilities on Needham Aggressive and Aggressive Allocation 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 Aggressive Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Aggressive Allocation.
Diversification Opportunities for Needham Aggressive and Aggressive Allocation
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Needham and Aggressive is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Aggressive Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Allocation 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 Aggressive Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Allocation has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Aggressive Allocation go up and down completely randomly.
Pair Corralation between Needham Aggressive and Aggressive Allocation
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 1.78 times more return on investment than Aggressive Allocation. However, Needham Aggressive is 1.78 times more volatile than Aggressive Allocation Fund. It trades about 0.07 of its potential returns per unit of risk. Aggressive Allocation Fund is currently generating about 0.07 per unit of risk. If you would invest 3,453 in Needham Aggressive Growth on October 23, 2024 and sell it today you would earn a total of 1,682 from holding Needham Aggressive Growth or generate 48.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Aggressive Allocation Fund
Performance |
| Timeline |
| Needham Aggressive Growth |
| Aggressive Allocation |
Needham Aggressive and Aggressive Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Aggressive Allocation
The main advantage of trading using opposite Needham Aggressive and Aggressive Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Aggressive Allocation 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 Aggressive Allocation will offset losses from the drop in Aggressive Allocation'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 |
| Aggressive Allocation vs. Dunham High Yield | Aggressive Allocation vs. Artisan High Income | Aggressive Allocation vs. Ab High Income | Aggressive Allocation vs. Needham Aggressive Growth |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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