Correlation Between Needham Aggressive and Pace High
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Pace High 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 Pace High 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 Pace High Yield, you can compare the effects of market volatilities on Needham Aggressive and Pace High 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 Pace High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Pace High.
Diversification Opportunities for Needham Aggressive and Pace High
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Needham and Pace is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Pace High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace High Yield 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 Pace High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace High Yield has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Pace High go up and down completely randomly.
Pair Corralation between Needham Aggressive and Pace High
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 8.11 times more return on investment than Pace High. However, Needham Aggressive is 8.11 times more volatile than Pace High Yield. It trades about 0.09 of its potential returns per unit of risk. Pace High Yield is currently generating about 0.13 per unit of risk. If you would invest 4,909 in Needham Aggressive Growth on November 3, 2024 and sell it today you would earn a total of 133.00 from holding Needham Aggressive Growth or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Pace High Yield
Performance |
| Timeline |
| Needham Aggressive Growth |
| Pace High Yield |
Needham Aggressive and Pace High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Pace High
The main advantage of trading using opposite Needham Aggressive and Pace High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Pace High 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 Pace High will offset losses from the drop in Pace High'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 |
| Pace High vs. Goldman Sachs High | Pace High vs. Barings High Yield | Pace High vs. Gugg Actv Invmt | Pace High vs. Ironclad Managed Risk |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |