Correlation Between Needham Aggressive and Janus Venture

Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Janus Venture 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 Janus Venture 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 Janus Venture Fund, you can compare the effects of market volatilities on Needham Aggressive and Janus Venture 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 Janus Venture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Janus Venture.

Diversification Opportunities for Needham Aggressive and Janus Venture

0.76

Correlation Coefficient

Needham Aggressive  Janus Venture

Poor diversification

The 3 months correlation between Needham and Janus is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Janus Venture Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Venture 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 Janus Venture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Venture has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Janus Venture go up and down completely randomly.

Pair Corralation between Needham Aggressive and Janus Venture

Assuming the 90 days horizon Needham Aggressive Growth is expected to under-perform the Janus Venture. In addition to that, Needham Aggressive is 1.56 times more volatile than Janus Venture Fund. It trades about -0.07 of its total potential returns per unit of risk. Janus Venture Fund is currently generating about -0.09 per unit of volatility. If you would invest  8,490  in Janus Venture Fund on December 23, 2024 and sell it today you would lose (550.00) from holding Janus Venture Fund or give up 6.48% of portfolio value over 90 days.

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

Needham Aggressive Growth  vs.  Janus Venture Fund

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 technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Janus Venture

Risk-Adjusted Performance

Very Weak

Over the last 90 days Janus Venture Fund 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 Needham Aggressive and Janus Venture

The main advantage of trading using opposite Needham Aggressive and Janus Venture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Janus Venture 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 Janus Venture will offset losses from the drop in Janus Venture's long position.

The idea behind Needham Aggressive Growth and Janus Venture Fund 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.