Correlation Between Needham Aggressive and Dreyfus New
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Dreyfus New 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 Dreyfus New 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 Dreyfus New York, you can compare the effects of market volatilities on Needham Aggressive and Dreyfus New 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 Dreyfus New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Dreyfus New.
Diversification Opportunities for Needham Aggressive and Dreyfus New
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Needham and Dreyfus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Dreyfus New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus New York 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 Dreyfus New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus New York has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Dreyfus New go up and down completely randomly.
Pair Corralation between Needham Aggressive and Dreyfus New
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 5.93 times more return on investment than Dreyfus New. However, Needham Aggressive is 5.93 times more volatile than Dreyfus New York. It trades about 0.08 of its potential returns per unit of risk. Dreyfus New York is currently generating about 0.06 per unit of risk. If you would invest 3,200 in Needham Aggressive Growth on August 31, 2024 and sell it today you would earn a total of 1,863 from holding Needham Aggressive Growth or generate 58.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Dreyfus New York
Performance |
| Timeline |
| Needham Aggressive Growth |
| Dreyfus New York |
Needham Aggressive and Dreyfus New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Dreyfus New
The main advantage of trading using opposite Needham Aggressive and Dreyfus New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Dreyfus New 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 Dreyfus New will offset losses from the drop in Dreyfus New's long position.| Needham Aggressive vs. The Hartford Midcap | Needham Aggressive vs. Mfs Emerging Markets | Needham Aggressive vs. Wells Fargo Special | Needham Aggressive vs. Baron Emerging Markets |
| Dreyfus New vs. Franklin New York | Dreyfus New vs. Franklin New York | Dreyfus New vs. Franklin New York | Dreyfus New vs. Ab New York |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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