Correlation Between Needham Small and Artisan Mid
Can any of the company-specific risk be diversified away by investing in both Needham Small and Artisan Mid 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 Small and Artisan Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Needham Small Cap and Artisan Mid Cap, you can compare the effects of market volatilities on Needham Small and Artisan Mid 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 Small with a short position of Artisan Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Small and Artisan Mid.
Diversification Opportunities for Needham Small and Artisan Mid
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Needham and Artisan is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Needham Small Cap and Artisan Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Mid Cap and Needham Small 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 Small Cap are associated (or correlated) with Artisan Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Mid Cap has no effect on the direction of Needham Small i.e., Needham Small and Artisan Mid go up and down completely randomly.
Pair Corralation between Needham Small and Artisan Mid
Assuming the 90 days horizon Needham Small is expected to generate 1.44 times less return on investment than Artisan Mid. In addition to that, Needham Small is 2.3 times more volatile than Artisan Mid Cap. It trades about 0.05 of its total potential returns per unit of risk. Artisan Mid Cap is currently generating about 0.16 per unit of volatility. If you would invest 1,539 in Artisan Mid Cap on November 3, 2024 and sell it today you would earn a total of 40.00 from holding Artisan Mid Cap or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Small Cap vs. Artisan Mid Cap
Performance |
| Timeline |
| Needham Small Cap |
| Artisan Mid Cap |
Needham Small and Artisan Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Small and Artisan Mid
The main advantage of trading using opposite Needham Small and Artisan Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Small position performs unexpectedly, Artisan Mid 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 Artisan Mid will offset losses from the drop in Artisan Mid's long position.| Needham Small vs. Needham Aggressive Growth | Needham Small vs. Needham Growth Fund | Needham Small vs. Baron Opportunity Fund | Needham Small vs. Jacob Micro Cap |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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