Correlation Between Needham Aggressive and Shelton Green
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Shelton Green 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 Shelton Green 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 Shelton Green Alpha, you can compare the effects of market volatilities on Needham Aggressive and Shelton Green 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 Shelton Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Shelton Green.
Diversification Opportunities for Needham Aggressive and Shelton Green
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Needham and Shelton is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Shelton Green Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Green Alpha 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 Shelton Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Green Alpha has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Shelton Green go up and down completely randomly.
Pair Corralation between Needham Aggressive and Shelton Green
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 1.1 times more return on investment than Shelton Green. However, Needham Aggressive is 1.1 times more volatile than Shelton Green Alpha. It trades about 0.08 of its potential returns per unit of risk. Shelton Green Alpha is currently generating about 0.01 per unit of risk. If you would invest 3,179 in Needham Aggressive Growth on September 4, 2024 and sell it today you would earn a total of 1,915 from holding Needham Aggressive Growth or generate 60.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Shelton Green Alpha
Performance |
| Timeline |
| Needham Aggressive Growth |
| Shelton Green Alpha |
Needham Aggressive and Shelton Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Shelton Green
The main advantage of trading using opposite Needham Aggressive and Shelton Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Shelton Green 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 Shelton Green will offset losses from the drop in Shelton Green'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 |
| Shelton Green vs. Artisan High Income | Shelton Green vs. Calamos Dynamic Convertible | Shelton Green vs. T Rowe Price | Shelton Green vs. Maryland Tax Free Bond |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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