Correlation Between Needham Aggressive and Mfs International
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Mfs International 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 Mfs International 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 Mfs International New, you can compare the effects of market volatilities on Needham Aggressive and Mfs International 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 Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Mfs International.
Diversification Opportunities for Needham Aggressive and Mfs International
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Needham and Mfs is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Mfs International New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International New 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 Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International New has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Mfs International go up and down completely randomly.
Pair Corralation between Needham Aggressive and Mfs International
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 2.07 times more return on investment than Mfs International. However, Needham Aggressive is 2.07 times more volatile than Mfs International New. It trades about 0.02 of its potential returns per unit of risk. Mfs International New is currently generating about 0.03 per unit of risk. If you would invest 4,966 in Needham Aggressive Growth on September 3, 2024 and sell it today you would earn a total of 128.00 from holding Needham Aggressive Growth or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Mfs International New
Performance |
| Timeline |
| Needham Aggressive Growth |
| Mfs International New |
Needham Aggressive and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Mfs International
The main advantage of trading using opposite Needham Aggressive and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Mfs International 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 Mfs International will offset losses from the drop in Mfs International'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 |
| Mfs International vs. Rbb Fund | Mfs International vs. Issachar Fund Class | Mfs International vs. Old Westbury Large | Mfs International 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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