Correlation Between American Beacon and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both American Beacon 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 American Beacon and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Stephens and Needham Aggressive Growth, you can compare the effects of market volatilities on American Beacon 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 American Beacon with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Needham Aggressive.
Diversification Opportunities for American Beacon and Needham Aggressive
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Needham is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Stephens 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 American Beacon 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 American Beacon Stephens 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 American Beacon i.e., American Beacon and Needham Aggressive go up and down completely randomly.
Pair Corralation between American Beacon and Needham Aggressive
Assuming the 90 days horizon American Beacon Stephens is expected to under-perform the Needham Aggressive. But the mutual fund apears to be less risky and, when comparing its historical volatility, American Beacon Stephens is 1.24 times less risky than Needham Aggressive. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Needham Aggressive Growth is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,677 in Needham Aggressive Growth on September 13, 2024 and sell it today you would earn a total of 168.00 from holding Needham Aggressive Growth or generate 3.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Stephens vs. Needham Aggressive Growth
Performance |
| Timeline |
| American Beacon Stephens |
| Needham Aggressive Growth |
American Beacon and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Needham Aggressive
The main advantage of trading using opposite American Beacon and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon 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.| American Beacon vs. American Beacon Stephens | American Beacon vs. American Beacon Stephens | American Beacon vs. Alger Small Cap | American Beacon vs. Amg Timessquare Small |
| Needham Aggressive vs. Needham Small Cap | Needham Aggressive vs. Needham Growth Fund | Needham Aggressive vs. Needham Aggressive Growth | Needham Aggressive vs. Oberweis Micro Cap 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |