Correlation Between Needham Aggressive and Via Renewables

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

Diversification Opportunities for Needham Aggressive and Via Renewables

-0.76

Correlation Coefficient

Needham Aggressive  Via Renewables

Pay attention - limited upside

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

Pair Corralation between Needham Aggressive and Via Renewables

Assuming the 90 days horizon Needham Aggressive Growth is expected to under-perform the Via Renewables. In addition to that, Needham Aggressive is 2.63 times more volatile than Via Renewables. It trades about -0.07 of its total potential returns per unit of risk. Via Renewables is currently generating about 0.14 per unit of volatility. If you would invest  2,290  in Via Renewables on December 25, 2024 and sell it today you would earn a total of  130.00  from holding Via Renewables or generate 5.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Needham Aggressive Growth  vs.  Via Renewables

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.

Via Renewables

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Via Renewables is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Needham Aggressive and Via Renewables

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

The idea behind Needham Aggressive Growth and Via Renewables 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.