Correlation Between Needham Small and Ambrus Core
Can any of the company-specific risk be diversified away by investing in both Needham Small and Ambrus Core 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 Ambrus Core 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 Ambrus Core Bond, you can compare the effects of market volatilities on Needham Small and Ambrus Core 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 Ambrus Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Small and Ambrus Core.
Diversification Opportunities for Needham Small and Ambrus Core
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Needham and Ambrus is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Needham Small Cap and Ambrus Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambrus Core Bond 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 Ambrus Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambrus Core Bond has no effect on the direction of Needham Small i.e., Needham Small and Ambrus Core go up and down completely randomly.
Pair Corralation between Needham Small and Ambrus Core
Assuming the 90 days horizon Needham Small Cap is expected to under-perform the Ambrus Core. In addition to that, Needham Small is 8.06 times more volatile than Ambrus Core Bond. It trades about -0.02 of its total potential returns per unit of risk. Ambrus Core Bond is currently generating about 0.05 per unit of volatility. If you would invest 984.00 in Ambrus Core Bond on November 6, 2024 and sell it today you would earn a total of 6.00 from holding Ambrus Core Bond or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Small Cap vs. Ambrus Core Bond
Performance |
| Timeline |
| Needham Small Cap |
| Ambrus Core Bond |
Needham Small and Ambrus Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Small and Ambrus Core
The main advantage of trading using opposite Needham Small and Ambrus Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Small position performs unexpectedly, Ambrus Core 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 Ambrus Core will offset losses from the drop in Ambrus Core'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 |
| Ambrus Core vs. Aig Government Money | Ambrus Core vs. Wesmark Government Bond | Ambrus Core vs. Virtus Seix Government | Ambrus Core vs. Payden Government Fund |
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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