Correlation Between Needham Small and Gabelli Healthcare
Can any of the company-specific risk be diversified away by investing in both Needham Small and Gabelli Healthcare 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 Gabelli Healthcare 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 The Gabelli Healthcare, you can compare the effects of market volatilities on Needham Small and Gabelli Healthcare 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 Gabelli Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Small and Gabelli Healthcare.
Diversification Opportunities for Needham Small and Gabelli Healthcare
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Needham and Gabelli is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Needham Small Cap and The Gabelli Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Gabelli Healthcare 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 Gabelli Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Gabelli Healthcare has no effect on the direction of Needham Small i.e., Needham Small and Gabelli Healthcare go up and down completely randomly.
Pair Corralation between Needham Small and Gabelli Healthcare
Assuming the 90 days horizon Needham Small is expected to generate 120.29 times less return on investment than Gabelli Healthcare. In addition to that, Needham Small is 1.56 times more volatile than The Gabelli Healthcare. It trades about 0.0 of its total potential returns per unit of risk. The Gabelli Healthcare is currently generating about 0.23 per unit of volatility. If you would invest 1,108 in The Gabelli Healthcare on November 8, 2024 and sell it today you would earn a total of 56.00 from holding The Gabelli Healthcare or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Needham Small Cap vs. The Gabelli Healthcare
Performance |
| Timeline |
| Needham Small Cap |
| The Gabelli Healthcare |
Needham Small and Gabelli Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Small and Gabelli Healthcare
The main advantage of trading using opposite Needham Small and Gabelli Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Small position performs unexpectedly, Gabelli Healthcare 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 Gabelli Healthcare will offset losses from the drop in Gabelli Healthcare'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 |
| Gabelli Healthcare vs. Barings Active Short | Gabelli Healthcare vs. Leader Short Term Bond | Gabelli Healthcare vs. Cmg Ultra Short | Gabelli Healthcare vs. Goldman Sachs Short |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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