Correlation Between Needham Aggressive and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Investec 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 Investec 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 Investec Emerging Markets, you can compare the effects of market volatilities on Needham Aggressive and Investec 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 Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Investec Emerging.
Diversification Opportunities for Needham Aggressive and Investec Emerging
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Needham and Investec is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets 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 Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Investec Emerging go up and down completely randomly.
Pair Corralation between Needham Aggressive and Investec Emerging
Assuming the 90 days horizon Needham Aggressive Growth is expected to under-perform the Investec Emerging. In addition to that, Needham Aggressive is 1.69 times more volatile than Investec Emerging Markets. It trades about -0.02 of its total potential returns per unit of risk. Investec Emerging Markets is currently generating about 0.04 per unit of volatility. If you would invest 1,077 in Investec Emerging Markets on November 7, 2024 and sell it today you would earn a total of 8.00 from holding Investec Emerging Markets or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Investec Emerging Markets
Performance |
| Timeline |
| Needham Aggressive Growth |
| Investec Emerging Markets |
Needham Aggressive and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Investec Emerging
The main advantage of trading using opposite Needham Aggressive and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Investec 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 Investec Emerging will offset losses from the drop in Investec 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 |
| Investec Emerging vs. Blackrock Science Technology | Investec Emerging vs. Red Oak Technology | Investec Emerging vs. Icon Information Technology | Investec Emerging vs. Columbia Global Technology |
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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