Correlation Between Needham Aggressive and Needham Growth
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Needham 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 Needham 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 Needham Growth Fund, you can compare the effects of market volatilities on Needham Aggressive and Needham 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 Needham Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Needham Growth.
Diversification Opportunities for Needham Aggressive and Needham Growth
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Needham and NEEDHAM is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Needham Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham 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 Needham Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Growth has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Needham Growth go up and down completely randomly.
Pair Corralation between Needham Aggressive and Needham Growth
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 0.87 times more return on investment than Needham Growth. However, Needham Aggressive Growth is 1.15 times less risky than Needham Growth. It trades about 0.31 of its potential returns per unit of risk. Needham Growth Fund is currently generating about 0.02 per unit of risk. If you would invest 4,624 in Needham Aggressive Growth on September 4, 2024 and sell it today you would earn a total of 470.00 from holding Needham Aggressive Growth or generate 10.16% 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. Needham Growth Fund
Performance |
| Timeline |
| Needham Aggressive Growth |
| Needham Growth |
Needham Aggressive and Needham Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Needham Growth
The main advantage of trading using opposite Needham Aggressive and Needham Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Needham 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 Needham Growth will offset losses from the drop in Needham 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 |
| Needham Growth vs. Needham Aggressive Growth | Needham Growth vs. Needham Small Cap | Needham Growth vs. Aggressive Investors 1 | Needham Growth vs. Meridian Trarian 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |