Correlation Between Needham Aggressive and Marsico Midcap
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Marsico Midcap 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 Marsico Midcap 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 Marsico Midcap Growth, you can compare the effects of market volatilities on Needham Aggressive and Marsico Midcap 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 Marsico Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Marsico Midcap.
Diversification Opportunities for Needham Aggressive and Marsico Midcap
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Needham and Marsico is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Marsico Midcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsico Midcap 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 Marsico Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marsico Midcap Growth has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Marsico Midcap go up and down completely randomly.
Pair Corralation between Needham Aggressive and Marsico Midcap
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 0.86 times more return on investment than Marsico Midcap. However, Needham Aggressive Growth is 1.16 times less risky than Marsico Midcap. It trades about -0.08 of its potential returns per unit of risk. Marsico Midcap Growth is currently generating about -0.24 per unit of risk. If you would invest 5,151 in Needham Aggressive Growth on October 9, 2024 and sell it today you would lose (117.00) from holding Needham Aggressive Growth or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Marsico Midcap Growth
Performance |
| Timeline |
| Needham Aggressive Growth |
| Marsico Midcap Growth |
Needham Aggressive and Marsico Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Marsico Midcap
The main advantage of trading using opposite Needham Aggressive and Marsico Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Marsico Midcap 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 Marsico Midcap will offset losses from the drop in Marsico Midcap'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 |
| Marsico Midcap vs. Marsico Focus Fund | Marsico Midcap vs. Marsico 21st Century | Marsico Midcap vs. Marsico Global Fund | Marsico Midcap vs. Marsico Growth Fund |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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