Correlation Between Gold Portfolio and Needham Aggressive

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

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

Diversification Opportunities for Gold Portfolio and Needham Aggressive

-0.28

Correlation Coefficient

Gold Portfolio  Needham Aggressive

Very good diversification

The 3 months correlation between Gold and Needham is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gold Portfolio Fidelity 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 Gold Portfolio 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 Gold Portfolio Fidelity 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 Gold Portfolio i.e., Gold Portfolio and Needham Aggressive go up and down completely randomly.

Pair Corralation between Gold Portfolio and Needham Aggressive

Assuming the 90 days horizon Gold Portfolio Fidelity is expected to under-perform the Needham Aggressive. In addition to that, Gold Portfolio is 1.32 times more volatile than Needham Aggressive Growth. It trades about -0.24 of its total potential returns per unit of risk. Needham Aggressive Growth is currently generating about -0.08 per unit of volatility. If you would invest  5,151  in Needham Aggressive Growth on October 9, 2024 and sell it today you would lose (117.00) from holding Needham Aggressive Growth or give up 2.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gold Portfolio Fidelity  vs.  Needham Aggressive Growth

Gold Portfolio Fidelity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Needham Aggressive Growth

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Needham Aggressive Growth are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Needham Aggressive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gold Portfolio and Needham Aggressive

The main advantage of trading using opposite Gold Portfolio and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Portfolio 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 Gold Portfolio Fidelity 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.