Correlation Between Sa Mkt and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both Sa Mkt and Needham Aggressive 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 Sa Mkt and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sa Mkt Fd and Needham Aggressive Growth, you can compare the effects of market volatilities on Sa Mkt and Needham Aggressive 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 Sa Mkt with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sa Mkt and Needham Aggressive.
Diversification Opportunities for Sa Mkt and Needham Aggressive
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SAMKX and Needham is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sa Mkt Fd and Needham Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Aggressive Growth and Sa Mkt 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 Sa Mkt Fd are associated (or correlated) with Needham Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Aggressive Growth has no effect on the direction of Sa Mkt i.e., Sa Mkt and Needham Aggressive go up and down completely randomly.
Pair Corralation between Sa Mkt and Needham Aggressive
Assuming the 90 days horizon Sa Mkt Fd is expected to generate 0.58 times more return on investment than Needham Aggressive. However, Sa Mkt Fd is 1.73 times less risky than Needham Aggressive. It trades about 0.11 of its potential returns per unit of risk. Needham Aggressive Growth is currently generating about 0.06 per unit of risk. If you would invest 2,791 in Sa Mkt Fd on September 12, 2024 and sell it today you would earn a total of 951.00 from holding Sa Mkt Fd or generate 34.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sa Mkt Fd vs. Needham Aggressive Growth
Performance |
| Timeline |
| Sa Mkt Fd |
| Needham Aggressive Growth |
Sa Mkt and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sa Mkt and Needham Aggressive
The main advantage of trading using opposite Sa Mkt and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sa Mkt position performs unexpectedly, Needham Aggressive 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 Needham Aggressive will offset losses from the drop in Needham Aggressive's long position.| Sa Mkt vs. Vanguard Total Stock | Sa Mkt vs. Vanguard 500 Index | Sa Mkt vs. Vanguard Total Stock | Sa Mkt vs. Vanguard Total Stock |
| Needham Aggressive vs. Needham Aggressive Growth | Needham Aggressive vs. Ultramid Cap Profund Ultramid Cap | Needham Aggressive vs. HUMANA INC | Needham Aggressive vs. Barloworld Ltd ADR |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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