Correlation Between Needham Aggressive and Income Fund
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Income Fund 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 Income Fund 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 Income Fund Income, you can compare the effects of market volatilities on Needham Aggressive and Income Fund 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 Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Income Fund.
Diversification Opportunities for Needham Aggressive and Income Fund
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Needham and Income is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Income Fund Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund Income 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 Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund Income has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Income Fund go up and down completely randomly.
Pair Corralation between Needham Aggressive and Income Fund
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 4.64 times more return on investment than Income Fund. However, Needham Aggressive is 4.64 times more volatile than Income Fund Income. It trades about 0.33 of its potential returns per unit of risk. Income Fund Income is currently generating about 0.06 per unit of risk. If you would invest 4,363 in Needham Aggressive Growth on April 26, 2025 and sell it today you would earn a total of 1,212 from holding Needham Aggressive Growth or generate 27.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Income Fund Income
Performance |
| Timeline |
| Needham Aggressive Growth |
| Income Fund Income |
Needham Aggressive and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Income Fund
The main advantage of trading using opposite Needham Aggressive and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Income Fund 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 Income Fund will offset losses from the drop in Income Fund'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 |
| Income Fund vs. Invesco Diversified Dividend | Income Fund vs. Mainstay Conservative Allocation | Income Fund vs. Wilmington Diversified Income | Income Fund vs. Harbor Diversified International |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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