Correlation Between Needham Aggressive and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Catalyst/millburn 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 Catalyst/millburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Needham Aggressive and Catalyst/millburn 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 Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Catalyst/millburn.
Diversification Opportunities for Needham Aggressive and Catalyst/millburn
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Needham and Catalyst/millburn is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Catalyst/millburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Needham Aggressive and Catalyst/millburn
Assuming the 90 days horizon Needham Aggressive Growth is expected to under-perform the Catalyst/millburn. In addition to that, Needham Aggressive is 2.52 times more volatile than Catalystmillburn Hedge Strategy. It trades about -0.16 of its total potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.19 per unit of volatility. If you would invest 3,901 in Catalystmillburn Hedge Strategy on October 13, 2024 and sell it today you would earn a total of 76.00 from holding Catalystmillburn Hedge Strategy or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Needham Aggressive Growth |
| Catalystmillburn Hedge |
Needham Aggressive and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Catalyst/millburn
The main advantage of trading using opposite Needham Aggressive and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Catalyst/millburn 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 Catalyst/millburn will offset losses from the drop in Catalyst/millburn'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 |
| Catalyst/millburn vs. Msift High Yield | Catalyst/millburn vs. Gmo High Yield | Catalyst/millburn vs. Virtus High Yield | Catalyst/millburn 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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