Correlation Between Needham Aggressive and Transamerica Emerging
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Transamerica Emerging 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 Transamerica Emerging 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 Transamerica Emerging Markets, you can compare the effects of market volatilities on Needham Aggressive and Transamerica Emerging 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 Transamerica Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Transamerica Emerging.
Diversification Opportunities for Needham Aggressive and Transamerica Emerging
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Needham and Transamerica is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Transamerica Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Emerging 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 Transamerica Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Emerging has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Transamerica Emerging go up and down completely randomly.
Pair Corralation between Needham Aggressive and Transamerica Emerging
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 1.7 times more return on investment than Transamerica Emerging. However, Needham Aggressive is 1.7 times more volatile than Transamerica Emerging Markets. It trades about 0.29 of its potential returns per unit of risk. Transamerica Emerging Markets is currently generating about -0.12 per unit of risk. If you would invest 4,905 in Needham Aggressive Growth on October 23, 2024 and sell it today you would earn a total of 345.00 from holding Needham Aggressive Growth or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Transamerica Emerging Markets
Performance |
| Timeline |
| Needham Aggressive Growth |
| Transamerica Emerging |
Needham Aggressive and Transamerica Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Transamerica Emerging
The main advantage of trading using opposite Needham Aggressive and Transamerica Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Transamerica Emerging 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 Transamerica Emerging will offset losses from the drop in Transamerica Emerging'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 |
| Transamerica Emerging vs. Needham Aggressive Growth | Transamerica Emerging vs. Pace High Yield | Transamerica Emerging vs. Lord Abbett Short | Transamerica Emerging vs. Dunham High Yield |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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