Correlation Between Aqr Risk-balanced and Needham Aggressive

Can any of the company-specific risk be diversified away by investing in both Aqr Risk-balanced 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 Aqr Risk-balanced and Needham Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aqr Risk Balanced Modities and Needham Aggressive Growth, you can compare the effects of market volatilities on Aqr Risk-balanced 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 Aqr Risk-balanced with a short position of Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Risk-balanced and Needham Aggressive.

Diversification Opportunities for Aqr Risk-balanced and Needham Aggressive

-0.17

Correlation Coefficient

Aqr Risk-balanced  Needham Aggressive

Good diversification

The 3 months correlation between Aqr and Needham is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Risk Balanced Modities 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 Aqr Risk-balanced 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 Aqr Risk Balanced Modities 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 Aqr Risk-balanced i.e., Aqr Risk-balanced and Needham Aggressive go up and down completely randomly.

Pair Corralation between Aqr Risk-balanced and Needham Aggressive

Assuming the 90 days horizon Aqr Risk Balanced Modities is expected to generate 0.43 times more return on investment than Needham Aggressive. However, Aqr Risk Balanced Modities is 2.34 times less risky than Needham Aggressive. It trades about 0.17 of its potential returns per unit of risk. Needham Aggressive Growth is currently generating about -0.08 per unit of risk. If you would invest  849.00  in Aqr Risk Balanced Modities on December 28, 2024 and sell it today you would earn a total of  71.00  from holding Aqr Risk Balanced Modities or generate 8.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Aqr Risk Balanced Modities  vs.  Needham Aggressive Growth

Aqr Risk Balanced

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Risk Balanced Modities are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Aqr Risk-balanced may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Needham Aggressive Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Needham Aggressive Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Aqr Risk-balanced and Needham Aggressive

The main advantage of trading using opposite Aqr Risk-balanced and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Risk-balanced 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.

The idea behind Aqr Risk Balanced Modities and Needham Aggressive Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.