Correlation Between Needham Aggressive and Western Asset
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Western Asset 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 Western Asset 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 Western Asset Intermediate, you can compare the effects of market volatilities on Needham Aggressive and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Western Asset.
Diversification Opportunities for Needham Aggressive and Western Asset
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Needham and Western is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Western Asset Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Interm 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Interm has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Western Asset go up and down completely randomly.
Pair Corralation between Needham Aggressive and Western Asset
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 5.98 times more return on investment than Western Asset. However, Needham Aggressive is 5.98 times more volatile than Western Asset Intermediate. It trades about 0.29 of its potential returns per unit of risk. Western Asset Intermediate is currently generating about 0.09 per unit of risk. If you would invest 4,641 in Needham Aggressive Growth on September 1, 2024 and sell it today you would earn a total of 453.00 from holding Needham Aggressive Growth or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Western Asset Intermediate
Performance |
| Timeline |
| Needham Aggressive Growth |
| Western Asset Interm |
Needham Aggressive and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Western Asset
The main advantage of trading using opposite Needham Aggressive and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Nuveen Arizona Municipal | Western Asset vs. Transamerica Funds | Western Asset vs. T Rowe Price | Western Asset vs. Oklahoma Municipal Fund |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |