Correlation Between Needham Aggressive and Multi Manager
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Multi Manager 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 Multi Manager 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 Multi Manager High Yield, you can compare the effects of market volatilities on Needham Aggressive and Multi Manager 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 Multi Manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Multi Manager.
Diversification Opportunities for Needham Aggressive and Multi Manager
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Needham and Multi is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Multi Manager High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager High 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 Multi Manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager High has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Multi Manager go up and down completely randomly.
Pair Corralation between Needham Aggressive and Multi Manager
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 8.1 times more return on investment than Multi Manager. However, Needham Aggressive is 8.1 times more volatile than Multi Manager High Yield. It trades about 0.2 of its potential returns per unit of risk. Multi Manager High Yield is currently generating about 0.42 per unit of risk. If you would invest 5,015 in Needham Aggressive Growth on October 26, 2024 and sell it today you would earn a total of 235.00 from holding Needham Aggressive Growth or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Multi Manager High Yield
Performance |
| Timeline |
| Needham Aggressive Growth |
| Multi Manager High |
Needham Aggressive and Multi Manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Multi Manager
The main advantage of trading using opposite Needham Aggressive and Multi Manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Multi Manager 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 Multi Manager will offset losses from the drop in Multi Manager'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 |
| Multi Manager vs. Balanced Allocation Fund | Multi Manager vs. Enhanced Large Pany | Multi Manager vs. Alternative Asset Allocation | Multi Manager vs. Hartford Moderate Allocation |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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