Correlation Between Moderately Aggressive and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both Moderately Aggressive 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 Moderately Aggressive and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderately Aggressive Balanced and Needham Aggressive Growth, you can compare the effects of market volatilities on Moderately Aggressive 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 Moderately Aggressive with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderately Aggressive and Needham Aggressive.
Diversification Opportunities for Moderately Aggressive and Needham Aggressive
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Moderately and Needham is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Moderately Aggressive Balanced 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 Moderately 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 Moderately Aggressive Balanced 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 Moderately Aggressive i.e., Moderately Aggressive and Needham Aggressive go up and down completely randomly.
Pair Corralation between Moderately Aggressive and Needham Aggressive
Assuming the 90 days horizon Moderately Aggressive is expected to generate 2.63 times less return on investment than Needham Aggressive. But when comparing it to its historical volatility, Moderately Aggressive Balanced is 2.06 times less risky than Needham Aggressive. It trades about 0.27 of its potential returns per unit of risk. Needham Aggressive Growth is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 5,206 in Needham Aggressive Growth on April 20, 2025 and sell it today you would earn a total of 338.00 from holding Needham Aggressive Growth or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Moderately Aggressive Balanced vs. Needham Aggressive Growth
Performance |
| Timeline |
| Moderately Aggressive |
| Needham Aggressive Growth |
Moderately Aggressive and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderately Aggressive and Needham Aggressive
The main advantage of trading using opposite Moderately Aggressive and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderately Aggressive 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.| Moderately Aggressive vs. Siit Equity Factor | Moderately Aggressive vs. Franklin Equity Income | Moderately Aggressive vs. Ab Select Equity | Moderately Aggressive vs. Ultra Short Term Fixed |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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