Correlation Between Needham Aggressive and Specialized Technology
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Specialized Technology 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 Specialized Technology 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 Specialized Technology Fund, you can compare the effects of market volatilities on Needham Aggressive and Specialized Technology 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 Specialized Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Specialized Technology.
Diversification Opportunities for Needham Aggressive and Specialized Technology
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Needham and Specialized is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Specialized Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Specialized Technology 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 Specialized Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Specialized Technology has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Specialized Technology go up and down completely randomly.
Pair Corralation between Needham Aggressive and Specialized Technology
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 1.11 times more return on investment than Specialized Technology. However, Needham Aggressive is 1.11 times more volatile than Specialized Technology Fund. It trades about 0.06 of its potential returns per unit of risk. Specialized Technology Fund is currently generating about 0.03 per unit of risk. If you would invest 4,695 in Needham Aggressive Growth on November 2, 2024 and sell it today you would earn a total of 380.00 from holding Needham Aggressive Growth or generate 8.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Specialized Technology Fund
Performance |
| Timeline |
| Needham Aggressive Growth |
| Specialized Technology |
Needham Aggressive and Specialized Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Specialized Technology
The main advantage of trading using opposite Needham Aggressive and Specialized Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Specialized Technology 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 Specialized Technology will offset losses from the drop in Specialized Technology'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 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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