Correlation Between Needham Small and Intrepid Endurance
Can any of the company-specific risk be diversified away by investing in both Needham Small and Intrepid Endurance 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 Intrepid Endurance 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 Intrepid Endurance Fund, you can compare the effects of market volatilities on Needham Small and Intrepid Endurance 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 Intrepid Endurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Small and Intrepid Endurance.
Diversification Opportunities for Needham Small and Intrepid Endurance
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Needham and Intrepid is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Needham Small Cap and Intrepid Endurance Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Endurance 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 Intrepid Endurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intrepid Endurance has no effect on the direction of Needham Small i.e., Needham Small and Intrepid Endurance go up and down completely randomly.
Pair Corralation between Needham Small and Intrepid Endurance
Assuming the 90 days horizon Needham Small Cap is expected to generate 1.77 times more return on investment than Intrepid Endurance. However, Needham Small is 1.77 times more volatile than Intrepid Endurance Fund. It trades about 0.04 of its potential returns per unit of risk. Intrepid Endurance Fund is currently generating about 0.02 per unit of risk. If you would invest 1,579 in Needham Small Cap on August 26, 2024 and sell it today you would earn a total of 308.00 from holding Needham Small Cap or generate 19.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Small Cap vs. Intrepid Endurance Fund
Performance |
| Timeline |
| Needham Small Cap |
| Intrepid Endurance |
Needham Small and Intrepid Endurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Small and Intrepid Endurance
The main advantage of trading using opposite Needham Small and Intrepid Endurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Small position performs unexpectedly, Intrepid Endurance 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 Intrepid Endurance will offset losses from the drop in Intrepid Endurance'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 |
| Intrepid Endurance vs. Amg Yacktman Focused | Intrepid Endurance vs. Intrepid Capital Fund | Intrepid Endurance vs. Heartland Value Plus | Intrepid Endurance vs. Appleseed Fund Appleseed |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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