Correlation Between Needham Small and Fidelity Sai
Can any of the company-specific risk be diversified away by investing in both Needham Small and Fidelity Sai 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 Fidelity Sai 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 Fidelity Sai Japan, you can compare the effects of market volatilities on Needham Small and Fidelity Sai 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 Fidelity Sai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Small and Fidelity Sai.
Diversification Opportunities for Needham Small and Fidelity Sai
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Needham and Fidelity is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Needham Small Cap and Fidelity Sai Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Japan 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 Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Japan has no effect on the direction of Needham Small i.e., Needham Small and Fidelity Sai go up and down completely randomly.
Pair Corralation between Needham Small and Fidelity Sai
Assuming the 90 days horizon Needham Small Cap is expected to under-perform the Fidelity Sai. In addition to that, Needham Small is 1.52 times more volatile than Fidelity Sai Japan. It trades about 0.0 of its total potential returns per unit of risk. Fidelity Sai Japan is currently generating about 0.02 per unit of volatility. If you would invest 968.00 in Fidelity Sai Japan on December 11, 2024 and sell it today you would earn a total of 42.00 from holding Fidelity Sai Japan or generate 4.34% 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. Fidelity Sai Japan
Performance |
| Timeline |
| Needham Small Cap |
| Fidelity Sai Japan |
Needham Small and Fidelity Sai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Small and Fidelity Sai
The main advantage of trading using opposite Needham Small and Fidelity Sai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Small position performs unexpectedly, Fidelity Sai 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 Fidelity Sai will offset losses from the drop in Fidelity Sai's long position.| Needham Small vs. Needham Aggressive Growth | ||
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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