Correlation Between Needham Aggressive and Meridian Growth
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Meridian Growth 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 Meridian Growth 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 Meridian Growth Fund, you can compare the effects of market volatilities on Needham Aggressive and Meridian Growth 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 Meridian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Meridian Growth.
Diversification Opportunities for Needham Aggressive and Meridian Growth
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Needham and Meridian is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Meridian Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Growth 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 Meridian Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Growth has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Meridian Growth go up and down completely randomly.
Pair Corralation between Needham Aggressive and Meridian Growth
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 1.15 times more return on investment than Meridian Growth. However, Needham Aggressive is 1.15 times more volatile than Meridian Growth Fund. It trades about 0.07 of its potential returns per unit of risk. Meridian Growth Fund is currently generating about 0.02 per unit of risk. If you would invest 3,188 in Needham Aggressive Growth on August 26, 2024 and sell it today you would earn a total of 1,789 from holding Needham Aggressive Growth or generate 56.12% 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. Meridian Growth Fund
Performance |
| Timeline |
| Needham Aggressive Growth |
| Meridian Growth |
Needham Aggressive and Meridian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Meridian Growth
The main advantage of trading using opposite Needham Aggressive and Meridian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Meridian Growth 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 Meridian Growth will offset losses from the drop in Meridian Growth'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 |
| Meridian Growth vs. Alliancebernstein Global High | Meridian Growth vs. Franklin High Income | Meridian Growth vs. Needham Aggressive Growth | Meridian Growth vs. T Rowe Price |
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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