Correlation Between Needham Aggressive and New Perspective
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and New Perspective 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 Aggressive and New Perspective into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Needham Aggressive Growth and New Perspective Fund, you can compare the effects of market volatilities on Needham Aggressive and New Perspective 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 Aggressive with a short position of New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and New Perspective.
Diversification Opportunities for Needham Aggressive and New Perspective
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Needham and New is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective and Needham Aggressive 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 Aggressive Growth are associated (or correlated) with New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and New Perspective go up and down completely randomly.
Pair Corralation between Needham Aggressive and New Perspective
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 1.86 times more return on investment than New Perspective. However, Needham Aggressive is 1.86 times more volatile than New Perspective Fund. It trades about 0.14 of its potential returns per unit of risk. New Perspective Fund is currently generating about 0.13 per unit of risk. If you would invest 5,149 in Needham Aggressive Growth on June 6, 2025 and sell it today you would earn a total of 528.00 from holding Needham Aggressive Growth or generate 10.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. New Perspective Fund
Performance |
| Timeline |
| Needham Aggressive Growth |
| New Perspective |
Needham Aggressive and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and New Perspective
The main advantage of trading using opposite Needham Aggressive and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| Needham Aggressive vs. Needham Aggressive Growth | Needham Aggressive vs. Needham Small Cap | Needham Aggressive vs. Ultramid Cap Profund Ultramid Cap | Needham Aggressive vs. Fidelity Advisor Semiconductors |
| New Perspective vs. Income Fund Of | New Perspective vs. New World Fund | New Perspective vs. American Mutual Fund | New Perspective vs. American Mutual 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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